This year every client who has reached out to me with concerns about their office lease renewal had valid reasons for their unease. Two had received renewal proposals from their landlord that appeared favorable, however, when the tenant contacted me they learned that their renewal rate was more than the landlord was quoting for new tenants. That’s a kick in the teeth to an existing customer/tenant, but it is a very common occurrence.
Even more disconcerting is that many times the range between the “asking” rental rate and the actual “taking” rental rate creates an even wider spread for an existing tenant. When the Great Recession hit Miami, the asking rental rates did drop for some buildings. Some landlords decided to hold onto an asking rate, but provide a deep discount to savvy negotiators. In the past couple of years, I have experienced this phenomenon often. It goes something like this:
I’ll call a leasing agent making an inquiry for my client. “Hi, Bob, I see in our database that you have 3,000 sf on the second floor. What’s the asking rate?”
“Well, Elizabeth, we are asking $28 (or $35 or whatever), but we’ll be really aggressive for the right tenant, so don’t let that asking price alarm you.”
What’s the definition of the “right tenant”? At this point, any company that has been in business for more than five years and has some decent financials is the right tenant.
If your lease is up for renewal within the next year, you need to act sooner rather than later. Your landlord knows that companies hate to move. They know it takes months to coordinate a move. It’s expensive not to mention a hassle with all the logistics. Don’t let your landlord gain that advantage and use it against you.
Renewals are one of my specialties. I can create a strategy that forces your landlord to compete for your business and provide you with a competitive renewal rate. It takes one phone call from you to gain the upper hand on your landlord. If you don’t want to move, you won’t, but you will achieve some savings to your bottom line. Call me for your free lease analysis and let me level the playing field with your landlord.