value. Use your tenant representation broker to help you stay informed. If you signed a lease at $27 per square foot and your clause has it jumping to $33 per SF but the market value is still at your original rate, then you would be doing your company a disservice by taking that clause. The best way to protect yourself is to start negotiating early enough and being well-informed about the market. You also need a fall-back option in case your landlord won’t budge. Your commercial broker will always be your broker for this space (unless you fire them). They can negotiate your release with you, and help your company make a choice. Just because you haven’t worked with them in a few years doesn’t mean they aren’t your broker for this space. If they can’t do it for some reason they will refer you to someone else who can. Brokers still make commissions on renewal leases just like they do for new leases, and the landlord still pays it.
PAY ATTENTI TENTION TO YOUR MARKE UR MARKET
There are possibly already rent escalations in your lease that should be coordinated with the market. Commercial real estate is dynamic and the market can rise and fall. This is why opting into your renewal clause isn’t always a good idea. You should know the rent rates and square foot prices in your area. This is a big part of negotiations and can give you leverage. If there’s a lower price in your market your landlord will have to be very stubborn to not at least match the average price in your market. So educate yourself and use the market to your advantage. Since renewals are usually more profitable, your landlord should be
171
Powered by FlippingBook