Renewing and renegotiating a lease is just as important as the initial lease negotiations. Often it has been 3, 5, or 10 years since the initial lease commenced. Market conditions and rental escalations have occurred since move in and need to be readjusted to reflect current market terms. Your company likely had operational changes and office space that needs improvement or basic updating to maintain a fresh appearance.
Depending on your submarket and current market conditions, you are entitled to tenant concessions, not only as a new tenant, but also as an existing tenant.
| Free Rent |
| Tenant Improvement Allowance |
| Furniture, Fixtures, Equipment Allowance (FF&E) |
These concessions are provided by each landlord to each tenant through negotiation requests. Most of the time, if you do not know what to ask for, your landlord will not offer it. This is where Cecil & Campbell can create great leverage. We work multiple office transactions in each submarket of Metro Atlanta. We have existing tenants in the majority of the properties, and have an ever-growing database consisting of historical transactions completed and neighboring tenant terms achieved. This data is the single most valuable asset in renewing an existing lease.
Even though you may be confident in remaining at your current property, Cecil & Campbell recommends receiving proposals from at least three (3) other competing properties in the immediate area. This provides three (3) solutions:
- This information creates leverage and is extremely valuable to ensure the most aggressive terms are achieved.
- It shows your landlord that you are willing to relocate if your needs are not met.
- You always need to have a backup plan if negotiations do not work out as planned. The process can only be hindered if you haven’t planned for something to go wrong. Having multiple courses of action keeps you prepared for any change in direction.
Do not fail to receive counsel during the renewal process as it is easy to just let your lease roll over to another lease term. You could miss on huge savings that could have been received if you had only asked.
Common questions during renewal negotiations:
- What is the difference between my landlords proposed rate and the rate given to other tenants within the same property?
- How many months of free rent should I receive based upon my new length of term?
- How many tenant improvement dollars per square foot should I receive? Can I use these funds for furniture, fixtures and equipment?
- Can I renegotiate other language items from my original lease and what should they be? For example:
- Hold over fee?
- Cap on expenses?
- Sublease fees?
- Right of first refusal (FOFR) on contiguous spaces?
- Termination options?