At some point in their tenancy, commercial tenants will be faced with the question of when to renew their office lease. Although the answer may seem simple – to renew close to expiry akin to a rolling residential lease – there are a number of factors to consider to ensure that your renewal runs smoothly.
What is driving the renewal of your office lease?
Renewing your office lease is important to consider as your tenancy draws to a close, and offers tenants the opportunity to consider whether their existing commercial space is still serving their needs. As businesses develop, their needs change, which makes lease renewal time a good opportunity to reflect on what your business needs from its commercial space. Here are a few pointers:
Is your brand still being represented by your unit?
Your commercial space transcends being a place to just conduct business – it becomes a conduit through which you embody your brand’s mission, vision and values. However, as your business evolves, many commercial tenants find that their commercial space no longer represents who they are, or which direction they wish to take their business in. Use your lease renewal as an opportunity for reflection, and place yourself in your client’s shoes: when they walk through the front door of your commercial space, do they get the right impression?
Is a new location needed?
Representing your brand’s mission, vision and values is closely intertwined with the physical location of your commercial space. For example, if you are aiming to expand your reach beyond your local postcode and become a more broadly appealing business, it may not be in your best interest to continue leasing a property in a small village or unknown road. This understanding of whether you need to physically relocate rather than continue with your existing lease may even be a good form of leverage when discussing your lease with your landlord, which we will discuss later.
Need more space? Or less?
As your business changes, so will your workforce – over the pandemic, many businesses moved their operations online, and in 2023 home working remains a popular mode of employment. As such, some businesses may find that they do not require as much commercial space as they originally thought necessary. Alternatively, the opposite can happen: if your business has grown and your number of employees has surged, you may be looking to lease an additional office or upgrade your existing one. Your company may be planning on a significant expansion, merger or a return to the office from home working, all of which will boost the space you require in your commercial unit. These factors must be considered before you decide to renew your lease.
How to get leverage with your landlord
Your lease renewal is a mutually beneficial agreement, which is why it is so vital to put yourself in the shoes of your commercial landlord to understand what serves them best. Be mindful of what they are searching for in a tenant – a business that is stable, reliable with rent payments, and has a good reputation.
However, you are still able to get leverage with your landlord to negotiate a more favourable lease. Make it known that you are browsing the market for other potential commercial spaces, and present your landlord with data which works in your favour:
- Are other units in your area coming with complimentary features such as free parking?
- Are similar units listed on the market for cheaper?
- Is your commercial unit looking outdated and in need of redecoration in order to represent your business in the best possible light?
- Can you pay the same amount of money and get a unit in an even more beneficial location?
This can provide you with a convincing argument to get more out of your lease renewal, and help you understand whether a relocation to another commercial unit is the best option for you. If you think you can get more for your money, but still want to stay at your current commercial unit, you could issue a detailed Request for Proposal. This is a list of proposed amends from tenant to landlord that succinctly lays out what changes you would like to see before you renew your lease.
Are you renewal ready?
Deciding when to renew your office lease can be a difficult decision, especially for new commercial tenants and those navigating a complex commercial market. That’s why Centrick Commercial are here to help – with 18 years of experience in helping our clients find their perfect commercial space, we are experts in the commercial field. We don’t just help you lease your next commercial unit: we’ll find you a space that fits in with your financial plans, represents your brand and allows your business space to grow. Contact our team of commercial experts using the form below, or browse our listings: