As a matter of course, real estate brokers are armed with an arsenal of strategies to save our clients money on lease renewals or new leases for office space. I need to keep at least a few of my trade secrets, but here are three tips to help you save money on your next office lease.
Hire a real estate advisor
Surprised? I didn’t think so. It’s no secret that hiring a real estate advisor for your next lease can save you a substantial amount of money. Time and time again, I talk to business owners who negotiated their own leases and are paying above-market rents. Just recently, I was hired to represent a local company on the renewal of their office lease. They’ve been doing it on their own for 15 years, but with my help and advice, they saved nearly 25 percent on their rent. They had paid above-market rates for all those years, but because no one was advising them–and the Landlord wasn’t going to say anything–they continued to overpay.
Tour the market
Whether you’re renewing your existing lease or looking for new space, it’s critical to tour the market to see what options are available. Even more important is requesting proposals and floor plans from a short list of sites. There are two main reasons you want to do this: 1) It’s always a good idea to have a plan “B” in case plan “A” falls through. For example, your first choice might fail because the building’s anchor tenant needs to expand. Rather than upset them, the owner will give them the space that you thought was yours if you haven’t already signed a lease; and 2) You should leverage other buildings against your first choice to get favorable deal terms. That’s negotiating 101.
Quantify your space requirements
Many industries have been going the route of shrinking their employees’ workspaces. The term we use in the real estate industry is “right-sizing.” According to CoreNet Global, a Corporate Real Estate data provider, by 2017 North American offices will average 151 square feet per worker. That figure is down from 176 square feet in 2012 and down from 225 square feet in 2010. How? By implementing advanced technologies such as the cloud and using more efficient furniture (think benching versus traditional cubes). This lets companies shrink their footprint while creating room for growth. It also fosters a more creative and collaborative setting, which increases productivity, morale and employee recruitment and retention.
There are, of course, many more ways to save money on your next office lease in addition to the tips mentioned above. The only way to know which strategies are right for your company is to meet with an expert who can educate and guide you through the myriad options. And it doesn’t matter how much time you have left on your lease. Schedule a meeting today with your real estate advisor to better understand what’s trending in your market and how you can leverage those trends.
Based in Princeton, N.J., Vinny specializes in tenant and landlord representation for Colliers International, working directly with his clients in the acquisition and disposition of office space. For more commercial real estate insight and trends, follow Vinny on Twitter.