Apr 08, 2020

What To Do If You Don't Want To Leave Your Office Space

By Don Catalano

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What To Do If You Dont Want To Leave Your Office Space
Some companies can't wait for their office lease to expire, but many organizations love their space. There are many reasons to stay when your lease is coming due, and if you want to stay, there are many ways to do it.

Get Some Help... Now

Even if you think it's going to be easy to stay in your office space, engage a professional tenant representative to work with you. He or she can help you understand your options under your lease. Your tenant rep can also give you information on the market and manage the negotiations with your landlord.

 

Time is of the essence in this process. If you want to increase the likelihood of staying in your space, you don't want to wait until the last second. Start the process long before your renewal option comes due (if you have one), so that you have the most flexibility in the negotiation process.

 

Understand Your Rights

There are usually three ways that you can stay in your space. Sometimes, you will be able to stay because your landlord actively wants to hold onto you as a tenant.  In other cases, you will have an option that gives you a guaranteed right to renew your lease and stay in your space for a set period. Even if you do not have an option, you might be able to stay in your space beyond your lease by paying holdover rent.  If you don't have those options, you still might have ways to, at least, stay in your building.

 

Negotiate a Renewal

When you negotiate a renewal with your landlord, you have a chance of doing better than the terms of your renewal option. If you leave your space and your landlord doesn't have another tenant lined up, they can expect to have the space vacant for a period of time, then they can usually expect to have to pay leasing commissions and provide concessions to get a new tenant to move it. By negotiating with your landlord, you might be able to get some of these benefits for yourself. After all, it's better to get 95 cents from you than 90 cents from a new tenant. 

 

The key to negotiating a renewal is to have your tenant representative start the process relatively early. That way, they can collect market data to get a sense of what to expect from your landlord. This also gives you time to move on to your next option.

 

Use Your Renewal Option

If your lease has the language and if you are a tenant in good standing, you can exercise your renewal option. Renewal options let you renew your lease and stay in your space for a set period of time (usually measured in years). Typically, renewal options either carry a predetermined rent or reset your rent to fair market value (or something close to it). You might not be able to get concessions beyond that, which is why it's better to try to negotiate first, but if you can't work out a negotiation, your option gives you a guaranteed way to stay.

 

Pay Holdover Rent

If you can't work out a negotiation with your landlord and you don't have an option to renew, your lease might have a holdover provision. This language specifies the terms under which you can stay beyond the expiration date of your lease. Frequently, holdover rent is expensive, and it is probably going to be adversarial with your landlord, but if you need additional time in your space, it might be your only option.

 

Get Creative

Finally, if you run out of options, you still might be able to stay in your building. See if there are alternative spaces that you can sublease or to which your landlord can move you. Many buildings have executive suite or coworking facilities that could work for you. You won't get the same kind of office, but you can keep your address and your connection to the building's community. 

 

Here are a few other articles you might enjoy:

8 Terms to Look for in Your Next Office Lease

6 Tips to Avoid Leasing the Wrong Office Space

5 Tips to Keep in Mind When Leasing Office Space

 

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Topics: Office Space

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Don Catalano

Don Catalano

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