Learn your options.
Hopefully, based on the other articles I’ve written, you had notes in your calendar as to when your lease expires and when you’ll need to provide your landlord a notice of renewal.
Questions to Ask Yourself
Here are a couple of things to think about/ask yourself. What if your lease states that the new rate will be at market, but not below the current rental rate at that time? Does this mean that if the rental rates are below what your firm is paying, you can’t renew?
Recently, I was hired by a client who had this clause in their lease. Their last “tenant representative” didn’t touch the rent when renegotiating the lease. Obviously, this was some serious misrepresentation by the agent in question—but that’s a different story for another day. When I came along, 5 years later, I found the tenant was paying $6/square foot over the market rate for the building! That is a significant difference. We ignored the clause and renegotiated the rate.
While doing so, we took a closer look at the lease and found several items that weren’t fair! For instance, if the tenant wanted to sublease their space, they’d have to wait 30 days for the landlord to approve. That would kill any deal! Hence, the landlord wanted it in there—it meant that even though my client could legally sublease the space, they’d never actually be able to. Not to mention, the landlord would be able to steal that potential sublease and find space for the prospective tenant in another suite in the building.
So, what should you do to avoid this situation? Nine months before your lease expires pull it out and see if there is anything that seems unfair. If you find something, put it on your list to negotiate with the landlord, or better yet, contact Compass Commercial at 248-817-5400, and we can do it all for you!