Do you remember the childhood nursing rhyme, “The Old Woman in the Shoe?” She had so many children, so little space she didn’t know what to do. Even as the economy is smoothing out and rumbling forward, many tenants find themselves with more space than they can accommodate. They have fewer employees. They outsource a percentage of their tasks. They simply work more efficiently than they did five years ago when the lease was signed.
What do you do with the excess space? You could make your employees very happy and create an onsite day care center or a room with a couple Wii stations for fitness and fun.
Some tenants will grimace and pay the rent with hopes they will grow back in the space. Think out of the allocated box.
First check your lease to see if you have a cancellation option. Then start exploring. Check with the tenants on either side of your space to see if they need to expand. If so, you might work out a deal you can present to your landlord.
You can also try a blend-in-expand lease whereby you agree to terminate the existing lease and make up a new one for five years with reduced space or reduced price. Your landlord, as stated in a previous blog, may look for longer term leases for the stability of his mortgage.
How about trading spaces? The landlord may have a smaller suite available and look to rent your space at a higher dollar figure. How about listing your space for sublease? You might find a complimentary company that would share business machines and administrative assistance in exchange for renting a block of cubicles and a corner office. You might be able to put up a wall between half your space and rent out the other half.
While you have your lease out don’t forget to see if you have the right to sublease and if there are any rules about subleasing you need to know before starting the process. Finding a sublease takes time and marketing effort. Make sure whoever you hire to sublease your space puts it in the local multiple listings.
For instance in most major towns Co-star and Loop-net are a great place. Some cities have local groups but make sure the space is listed in a commercial database. Listing in residential databases is good as long as it is also listed appropriately. Some people use Craig’s List, Facebook and Linked-In media platforms to help draw tenants.
You do have options. Right within every problem is its own solution. Your creativity comes from finding that solution so your business continues to thrive.