Most commercial real estate experts agree that the single biggest missed opportunity by commercial tenants happens at the time of lease renewal.
Some are content to simply renew, given the difficulty and complexity involved with moving locations—with perhaps a brief conversation about the rental rate. Others wait to begin the lease renewal discussion until only a few months (or weeks!) remain in their lease, leaving no realistic opportunity for them to find a replacement office and move in time. They’ve handed all the negotiating leverage to the landlord.
A lease renewal is your opportunity as a tenant to negotiate new incentives, change any business terms you are unhappy with, receive a refund of your security deposit, and plan for the future. But these things can only happen if you begin early enough that the landlord believes you actually could move.
Is there a stain on the carpet right outside your entry door? Negotiate its replacement.
Is the paint in your space marked up and looking worn? Negotiate a new paint job.
Have you paid on time for the entire lease term? Ask for your security deposit back.
Do you have expansion plans? Consider asking for an expansion option or right of first refusal.
Don’t need any of these? Maybe a few months of free rent would be a fair trade for a new multi-year commitment from your business.
For these negotiations to be successful, you have to start early—tenant rep professionals will typically encourage starting the process 12-18 months prior to your lease expiration date. This gives you the leverage you need to have a fair, unpressured conversation with your landlord—and sets you up for the maximum level of success in your lease renewal.