07 Mar 7 Steps to Successfully Navigate a Commercial Lease Expiration
Nearing the end of an office lease is a bit like reaching a fork in the road for your company’s future. And for CEOs, CHROs and Facility Managers, making the right choice and ensuring everything goes smoothly requires careful planning and strategic decision-making.
With 30+ years’ experience designing and building workspaces in Manhattan, and throughout the Greater New York City area, we have our fair share of experience in this area. We’ve also been asked for advice on this subject quite a lot lately, so we thought we’d put together a comprehensive guide for you.
Read on for our seven essential steps for successfully navigating a lease expiration.
1. Be the early birds that get the worm
Early assessment is key for navigating a commercial lease expiration, and we advise all our clients to begin the process well in advance. Early assessment allows you to evaluate your current space, observe where it works well (or where it doesn’t) to evaluate your firm’s evolving needs, as well as the impact of remote and hybrid work arrangements, and then determine whether renegotiation – or indeed, a relocation – is your next best step.
2. Get your dream team together
Get a team together that includes members from your company’s various departments – ops, finance, HR, facilities, marketing, etc – and get their input on what works well for them and what else they need from their working environment. This will provide a comprehensive overview and help you to address specific needs related to space requirements, employee preferences, and budget constraints.
3. Ask the design/build experts on board
With a design/build team’s knowledge on office space and what you can/can’t do in regards to space planning, it’s important to consult a team of designers/builders *prior* to negotiate your lease to confirm you’re making the best decision for your company. A design/build firm’s expertise will help you transform your new space into an efficient, inspiring and future-ready environment. Professional designers will show you how a new, attractive, well-functioning, tech-integrated workspace is essential for communicating your company’s culture and goals, and boosting your bottom line.
4. Analyze the space
Time to conduct a detailed analysis of your space requirements. Consider factors such as employee headcount, departmental needs, and future growth projections. This analysis will help guide your decisions on the size and layout of the space you need.
5. Get your financial plan sorted
You will need to develop a realistic budget that includes the cost of the new lease *and* expenses related to relocation, build-out, and potential downtime, if that’s the path you wish to take. Getting a tight financial strategy in place at this point will help your firm to stay financially stable during the transition.
6. Time to negotiate
Whether you choose to renew or relocate, negotiating favorable lease terms should be number one on your priorities list. Enlist the services of recommended legal and real estate professionals to work with your design/builder and ensure the terms align with your company’s long-term goals, protect your interests, and most importantly do not lock you in to using the landlord’s architect or contractor.
Every lease negotiation includes a tenant improvement (TI) allowance. Make sure that this is money made available to you to pay your chosen design/builder, not money paid to the landlord’s architect and contractor who are not necessarily working for your best interests. Don’t let the fox be in charge of the chicken coop.
7. Plan for a seamless transition
Once you’re ready to embark on the next step, make sure ‘minimize disruption to operations’ is at the top of your to-do list. How? Keep your people informed and in the loop throughout the whole process, addressing any concerns they might have along the way, and communicating the benefits of the upcoming changes whenever possible. A transition with excellent communication flows more smoothly, leading to a positive team fully on board with your plans.
To sum up…
We hope our blog has given you food for thought and comes in helpful if you and your company are currently on the cusp of a lease expiration. We’re also here to take some of the heavy lifting off your hands if you are. Our Workplace Analysis & Strategy service is an evidence-led process that allows us to see the big picture of your workspace – how it operates, where it excels and where it requires optimization to reach its potential.
To find out more about how we can help you and to request a free RI Workplace consultation, click here: https://calendly.com/riworkplacefreeconsultation/
