So many small business owners wait until the last minute when it comes to renewing their Long Island office space lease because they assume that the only consideration and change that needs to be made is the date and the lease amount. But that’s not the case! Especially if you weren’t as savvy as you would have liked to have been when you first signed the Long Island office space lease.
Here are some mistakes that I see being made all the time when it comes time to renewing the lease on a Long Island office space.
- Starting the Lease Renewal Process Late
- There are 2 solid reasons to begin negotiating your lease renewal 12 months before the expiration date.
- You can save tens of thousands of dollars by pre-empting your current Long Island office space lease expiration and substituting more tenant-favorable rents because your existing rent schedule has probably been subject to 5 or more years of rent escalations.
- It takes 4 to 8 or 12 months to find, negotiate, design, and build new Long Island office space. So, if you wait until less than 4 months are remaining on your lease, your landlord will know you have no practical alternatives. As a result, you will surrender your negotiating leverage. With no other options, you will be capitulating, not negotiating.
- There are 2 solid reasons to begin negotiating your lease renewal 12 months before the expiration date.
- Understanding Your Office Lease Leverage
Your landlord will lose the equivalent of two years’ rent…or more…if they must replace your tenancy. How is that possible? Let’s begin with the 6 to 12 months (probably longer) it will take to replace your tenancy. Next, your landlord will have to rebuild the suite, pay professional fees, and give ‘free’ rent to the new tenant. Together, these factors will equate to the value of 2 or more years’ rent. You have leverage just need to know how to apply it. - Believing Your Landlord’s Ploy
“If you use a broker, I’ll have to pay a commission, so you’ll have to pay more rent” is a disingenuous throwaway line. Landlords often use it to gain a negotiating advantage by dissuading you from having an expert at your side. The truth is…landlords fear the broker-consultant will introduce you to other landlords, creating competition for your tenancy and compelling your landlord to give you better terms and conditions. - Failing to Embrace Change
Whereas most tenants recognize their office space as having become too small, many need to recognize that their office space has become too large, inefficient, and needlessly expensive. In today’s office market, if you can jettison just 750 square feet, you will save $125,000 over the next 5 years! That’s enough to buy a BMW…maybe 2! - Negotiating Your Office Space Lease on Your Own Behalf
Your landlord negotiates Long Island office leases every day and is supported by a team of experts. On the other hand, the last time you negotiated a Long Island office lease was probably 5 or 10 years ago. That’s plenty of time to forget the nuances of Long Island office lease negotiations. Accordingly, if you do not have an expert by your side, you will handicap your negotiations. Reach out to an expert! - Failing to Recognize that ‘Things Wear Out’
Updating your work environment should be a priority. Why? Because, over time, floor and wall coverings, ceiling tiles, etc., wear out. Focusing solely on negotiating the rent per square foot while neglecting physical improvements to your office suite will diminish your work environment, ability to retain and attract employees…and profitability. - Forgetting To Negotiate Money Issues Other Than Rent:
- Advancing The Base Years
- Asking for Free Rent
- Reducing Your Security Deposit
Long Island office space lease negotiations are highly detailed. Oversights quickly add up to big, expensive mistakes.
Final Thoughts
Never casually approach your Long Island office lease renewal. Success is accomplished by applying your leverage while reaching out to an expert. The ‘success’ formula is simple…leverage + knowledge = savings…big savings!
