What the Heck is Going On?
Miami has entered another phase of frantic activity and it’s very easy to get caught up in it all. Leasing activity is bustling, investment sales are brisk and office developers are moving dirt. We are seeing rents escalate across all submarkets and landlords are tightening up on concessions. Free rent is rapidly becoming obsolete. What happens if your lease expires during this period of the real estate cycle? How do you manage your costs when rents are rising? Your renewal negotiation is more important than ever. Here are three strategies to deploy.
The first thing is not to allow the landlord to use time as its leverage. Begin your renewal process early. One of your best weapons on a renewal is the possibility of you relocating to another building. In order to make that threat viable, you need to start your renewal process at least a year prior to expiration. You also need a tenant rep broker who will assist with this strategy. Your landlord knows exactly how long it takes to construct a space and negotiate a lease. If you contact them 60 days prior to your expiration, you have lost the negotiation before you ever picked up the phone.
The second strategy is to have a solid Plan B. Have a space that you like, that would work for your office. If you are going to threaten to move, you need to know what your options are down to pricing and terms.
The third strategy is be careful what you say. Less is more in this negotiation. Don’t talk about your renewal to anyone. Period. Not the cleaning person, your secretary, your kid’s baseball coach – nobody. You have no idea how I pick up intel on what tenants are thinking. For some reason, people love to tell me things…and I listen.
During this uptick of the real estate cycle, you need an expert who has the right relationships to guide you through the process. I am that expert so give me a call today to discuss your unique situation.