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Strategies for Renewing your Lease

As your lease expiration approaches, your inclination may be to contact your landlord to express interest in renewing. By doing so, however, you risk putting yourself in a weak position for negotiating a fair deal. Consider the messages this sends to your landlord:

·      Moving is expensive and a disruption to your business operations.

·      It is easier to stay in your current space and, therefore, you might be willing to pay a premium to renew.

·      Rents should only go up – even though your previous rate included a tenant improvement allowance paid by the landlord, amortized over the term of the lease.

In other words, by telling your landlord you want to stay, your landlord is less motivated to be aggressive in the terms they offer.

At REC, we recommend a different approach. Hire a tenant’s broker who has a duty to serve your best interests under an agency relationship. Your tenant rep broker will contact your landlord to tell him or her that, like any sophisticated tenant, your broker has been engaged to help you evaluate all spaces on the market that may be a better fit for your business – and that if the current space is a competitive option, you will consider a renewal. Framing the renewal process in these terms requires the landlord to re-earn your business as a tenant in his or her property. And as a result, we should be able to achieve a better rental rate and other incentives like a free rent period and a tenant improvement allowance to give your space a refresh.

Contact REC today to discuss how we can bring value to your lease renewal. As with any new real estate search, you do not pay our fee for a lease renewal.

Contact Clay Brown               720-707-1541             cbrown@rec-colorado.com

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Strategies for Renewing your Lease

As your lease expiration approaches, your inclination may be to contact your landlord to express interest in renewing. By doing so, however, you risk putting yourself in a weak position for negotiating a fair deal. Consider the messages this sends to your landlord:

·      Moving is expensive and a disruption to your business operations.

·      It is easier to stay in your current space and, therefore, you might be willing to pay a premium to renew.

·      Rents should only go up – even though your previous rate included a tenant improvement allowance paid by the landlord, amortized over the term of the lease.

In other words, by telling your landlord you want to stay, your landlord is less motivated to be aggressive in the terms they offer.

At REC, we recommend a different approach. Hire a tenant’s broker who has a duty to serve your best interests under an agency relationship. Your tenant rep broker will contact your landlord to tell him or her that, like any sophisticated tenant, your broker has been engaged to help you evaluate all spaces on the market that may be a better fit for your business – and that if the current space is a competitive option, you will consider a renewal. Framing the renewal process in these terms requires the landlord to re-earn your business as a tenant in his or her property. And as a result, we should be able to achieve a better rental rate and other incentives like a free rent period and a tenant improvement allowance to give your space a refresh.

Contact REC today to discuss how we can bring value to your lease renewal. As with any new real estate search, you do not pay our fee for a lease renewal.

Contact Clay Brown               720-707-1541             cbrown@rec-colorado.com

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© 2019 Real Estate Consultants of Colorado, LLC

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