Smart Office Leasing Strategies: Capitalizing on Today's Real Estate Market

Posted by LauraDerbyshire on May 18th, 2020

As your office space lease approaches expiration, you will face an important decision: Should you renew the office lease or relocate operations when the lease expires? The answer is simply not that simple. In today's market, there are a myriad of factors to consider when deciding to renovate or relocate. Collision in commercial property market conditions, economic shifts, generational shifts in the workforce, and rising technology are causing companies to reconsider their options and consider alternatives that may not have been as attractive in the past.

Many regions of the country are currently facing a vast surplus of office space, creating a highly favorable buyer market for those considering moving office. For others, the substantial financial investment put into their current space, the bad time, or the simple hassle of moving may lean them more toward staying and choosing to renew. Either way, there are a few factors that you may want to consider, and more importantly, some landmines that you'll want to avoid on the Langrealty.

Assess your present and future needs:
To get started, start with a solid strategic plan to determine where your business anticipates five to ten years from now. In essence, companies must conduct a full assessment of their current and future needs. Some questions to ask yourself are: Does your office space effectively support your operation? What is the expected growth of your organization? What deliverables could you produce in the future that will affect your need for space? Does the space support your company's infrastructure technologically and how costly and / or disruptive would it be to upgrade the technology to meet your company's needs? Will more employees work remotely in the future? What does your current space say about the image of your organization? Is this the image you want to convey? These questions, among others, will help guide your decision. After all, your business is on a continuous path of evolution - it's the only true certainty, and leveraging those changes to achieve better results is what will drive success.

Take advantage of the current real estate market:
The influence of landlord-tenant negotiation has changed enormously in recent decades; However, it is now a very favorable market for companies considering relocation. A surplus of office vacancies has paved the way for tenants to secure excellent leasing terms and let's face it, due to fierce competition in the market, some homeowners offer financial incentives that are simply hard to put aside. Businesses may now enter a higher-grade office building in a better location at the same rental rate, or in some cases, even a lower rate than their current building. However, change is in the air.

Recent studies have reported a slow increase in rental rates. For this reason, many tenants are doing their best to secure rental rates for as long as possible. Rather, homeowners are targeting shorter three-year leases so they can take advantage of better rental rates in the future.

For many companies, the motivation to relocate can be wide and varied, from the perspective of future growth, an obsolete or inefficient current office space, an obsolete technological infrastructure, the desire to improve their brand and image through a new space. and improved or the pure desire to reduce expenses. Regardless of the reason, starting from scratch with a clean palette is a golden opportunity for companies to make smart design decisions that support their business goals to create a more effective and efficient workplace. However, don't overlook some important factors.

It is important to remember that you cannot compare apples to apples, which means you cannot compare rental rates per square footage. When comparing renting from your current location to renting a new location, keep in mind that a space specifically designed to meet the needs of your business could be much more efficient and require fewer square feet. Thus, you may end up paying less rent in a new location and having a much more efficient space as well.

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