You’d be amazed at the number of commercial tenants that run out of space well before their lease term runs out. There are few things that are more chaotic to a business operation than having to work out of multiple locations because of poor planning. That’s why it’s vital that you plan for your growth before you start looking for space.
There are three keys to ensuring that you don’t run out of space before you run out of lease term.
The first key is to conduct a comprehensive needs analysis. And while this might seem obvious, the real question is “do you know all the right questions to ask to effectively plan your relocation?” A comprehensive needs analysis requires the specialized knowledge and skill of a seasoned tenant rep broker.
The next key is to know the leasing techniques available to manage your growth. Here are just few:
Conventional expansion options
Must take or guaranteed takedown options
Warehousing surplus space
Rights of refusal to lease or buy
Rights of 1st opportunity to lease or buy
Early termination rights and penalties, at will or for cause
Tenant improvements on optioned space
Each of these techniques has its own complexities and negotiating for them is never easy. Landlords may initially refuse or attempt to water down some of these types of expansion techniques. The reason is because it can limit their capacity to lease up the rest of their building and, therefore, they give them slowly or not at all. These are often reserved for the larger tenants, but not always.
The third key is to know which landlords in your market area have the greatest capacity and willingness to accommodate the growth of tenants. Some are more flexible than others. Some own or control more properties than others. Some do a better job of planning in their buildings to accommodate and foster the growth of their tenants.
A successful lease negotiation is not just about rents, term, and tenant improvements. It begins with a comprehensive needs analysis conducted by a professional Tenant Rep Broker who knows all the right questions to ask. Equally important is clarity on the steps in the process to arrive at a timely occupancy.
The planning and staging of the growth of your facilities to meet your needs in the future is paramount to a successful tenancy. Arriving at the end of your lease term with the appropriate amount of space to accommodate your business needs helps your business run smoothly throughout the lease term.
If you need a new office location in Plano, Frisco, Addison or one of the other Dallas area submarkets, or are just trying to decide whether to renew or move, contact me now. Let's get your lease transaction started correctly with a great needs analysis.
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