There comes a time in many business owner’s lives when they have a very important decision to make. That time typically coincides with lease expiration. Do you renew your lease or do you pack up your business and relocate? It’s an incredibly tough decision with pros and cons on both sides.
Why Lease Renewal Makes Sense
For many business owners, the thought of relocating is anxiety inducing – the planning, the search for a new location, the packing, and, ultimately, the move. It’s enough to overwhelm even well-seasoned business owners, especially if you really like your current location. Still, a business is a business and if the property manager is trying to raise rent beyond what makes sense for you, you are left with two options: relocate or negotiate.
If you really do not want to move, working with a commercial real estate broker specializing in lease renewal makes sense. Plus, there are multiple benefits to staying at your current location.
- You Have Leverage: The truth is that your property manager doesn’t want you to leave either. It is actually much better for them if you stay put, which gives you and your broker some real negotiating power.
- Save Time: As a business owner, your time is precious. Even with an experienced tenant broker on your side, finding a new location requires a lot of your time to review properties, visit locations, and make a decision.
- Avoid Disruptions: Obviously, relocating your business is a big endeavor and interruptions to operations throughout a move can cost you money. Staying in your current location means you can avoid costly shutdowns and maintain business as usual.
- Avoid Additional Expenses: On top of disruptions, moving your business costs money. There are moving expenses (packing supplies, movers, etc.) and upfront costs associated with a new location, such as the security deposit.
- Your Space Works: If your current space works well for you, why mess with success? When relocating, you will likely need to remodel your new location, at least partially, to fit your needs. This means even more upfront costs and delays in operations.
- Ask For Tenant Improvement (T.I.): And if your current space is almost perfect, lease expiration is a great time to negotiate some improvements. Renewing your lease is essentially a brand new agreement, and can include T.I. to better align your space to your business needs.
- Strengthened Relationships: When you stay at your current location, you also strengthen your relationship with your property manager, and they may be much more willing to work with you again and listen to your concerns in the future. If you relocate, you are starting from scratch with a new landlord.
Simply put, when lease renewal makes sense for you and your business, it’s the easier of the two options. Of course, there are times when your property manager just won’t come down enough to make the price work for you. When this happens, it’s time to really consider relocation.
Why Relocation Makes Sense
Your office lease is a large part of your company’s overhead expenses, so when your property manager insists on a rate that doesn’t make sense for you, it may be time to pack up and relocate. In fact, there are many benefits to moving your business. And with lease expiration on the horizon, now is a great time to evaluate every option.
- Find a Better Location: As the old real estate saying goes, location, location, location. When it comes to relocating your business, you have a tremendous opportunity to find a new location that gives you better access to new and existing customers. Through market research, you can also determine which location makes the most sense.
- Save Money: Relocating your business to a region with lower costs for rent, utilities and other expenses will help you cut spending and increase profits. This is incredibly beneficial if you are able to relocate to an up-and-coming area before rates increase.
- Increase Your Space: Moving to a new location is a great opportunity to expand your business. If you’re in a situation financially where you can grow your business, now’s your chance!
- Reduce Operating Costs: Or maybe you’re in a situation where you’re looking to cut costs. Maybe your current location is more space than you really need. Relocating is a great opportunity to downsize your space and reduce operating costs.
Ultimately, relocating your business is all about finding a better space – a location that fits all of your needs much more nicely than your current location. Again, working with a commercial real estate broker can help you navigate the commercial real estate market.
United Development Realty Can Help You Make the Best Decision With Lease Expiration Looming
United Development Realty is a Commercial Real Estate Broker in Maryland specializing in tenant representation. We can help you make the best decision for your business with lease expiration looming, whether that means renegotiating your lease or relocating your business. We start by listening to you – your current situation, your wants, and your needs. Then, once we fully understand your business, we can assist you through a tailored package of services. We have access to up-to-date market data, databases, and tools that track industry trends, vacancy rates, and comparable properties. This data allows us to be incredibly strategic when determining the future of your business. We can use this information to renegotiate your lease and ensure you are not paying above the current real estate market, or we can tap into our extensive network of property owners and developers to find a new space that makes more sense for your business both now and in the future. Please call our office (locations in Bethesda 240-221-1976 and Fells Point 410-522-1632) to get in touch with a licensed tenant representation broker today.