Finding the right commercial space in Maryland can make anyone feel like Goldilocks. This location is too expensive. This location is too noisy. But you keep searching and searching until you find a location that is just right. So, when the time inevitably comes when the lease on that “just right” location is set to expire, it’s understandable that you don’t want to leave and start the search all over again. This is why working with a commercial real estate broker specializing in lease renewal makes sense.
Why Should I Use a Broker for Lease Renewal?
Working with a broker can help save you time and money.
- Negotiations: A qualified local broker will know the landlords, the properties, the market conditions, the competing dynamics that play a role in discussions, opportunity costs, and many other factors that might affect your new business terms. While some other types of business professionals, such as consultants, lawyers, and accountants, could assist you with these negotiations, they don’t have an intimate knowledge of the local commercial real estate market. They may not be aware of other opportunities that could affect the outcome of your deal. Conversely, a broker may have already done negotiations with your landlord or your building and be starting where others hope to end up.
- Time: Lease renewal negotiations can take a great deal of time. As the old saying goes, time is money. And your time is precious. So, instead of trying to negotiate the terms of your lease renewal yourself, enlist the help of a broker who’s been around the block a time or two. Let the broker do what they do best while you do what you do best. The broker is able to research the market, analyze lease terms, and negotiate on your behalf while you focus on running your business.
- Money: Many times tenants focus on their business and forget that their lease can be a large part of the company’s overhead expense. So, instead of simply accepting the terms of your landlord’s lease, it can save you considerable money to try and negotiate more favorable terms. Remember, it is a lot easier and cheaper for property managers to keep existing tenants, so you have some leverage. But without representation in your corner, you could find yourself paying more than you should. Contractual escalations can outrun the real estate market in some situations, leaving the business owner paying above the current real estate market. An experienced broker will let you know what is fair and help negotiate the best possible terms for your lease.
- Tenant Improvement: Your broker can also use lease renewal to negotiate improvements to your commercial space. Renewing your lease doesn’t just mean an extension of the old lease terms. It’s essentially a brand new agreement, and may include tenant improvement (T.I.) to better align your space to your business needs.
How Much Will a Broker Cost Me?
In most cases, hiring a commercial real estate broker to negotiate the terms of your new lease won’t cost you anything. Almost every lease deal has a paid commission built into it, funded by rental dollars. If you choose not to enlist the help of a broker to negotiate on your behalf, the landlord and/or his broker probably takes the full commission. So, when you don’t use a tenant rep broker, you’re not saving any money, but you are giving up considerable leverage.
In those incredibly rare occasions when the commission is not built into the lease deal, it can still save you quite a bit of money to employ a broker to negotiate more favorable terms for your renewal.
When Should I Start the Lease Renewal Process?
While commercial real estate brokers are no stranger to last-minute lease renewals, thinking ahead can payoff. Waiting until your lease is just about up can severely limit your options. So, it’s best to start reviewing your options when you have about a year left on your lease. This is the perfect time to contact a commercial real estate broker to strategize.
United Development Realty is a Maryland Broker Specializing in Lease Renewal
United Development Realty is a Commercial Real Estate Broker in Maryland specializing in lease renewal. We take the time to get to know you, your vision, and your objectives so that we can better assist you in achieving your business goals. We will guide you through the lease evaluation process to ensure you have a full understanding of all your options before we proceed. Then, we work with you and the landlord to negotiate terms that make sense for your business both now and in the future. We know Maryland commercial real estate inside and out and have access to up-to-date market data, databases, and tools that track industry trends, vacancy rates, and comparable rental rates.
Please call our office (locations in Bethesda 240-221-1976 and Fells Point 410-522-1632) to get in touch with a licensed commercial real estate broker today.