Rights to Renewal - What Every Tenant Must know
The first question I ever ask to tenants is: “Renew or Relocate?”
Because moving is scary, and I want to make sure that tenants are ready for that. The idea of moving your entire business to a new building, a new city, even a new floor in the same building, could be daunting. Sometimes, it makes more sense for a business to renew their lease in their current space, even if they could get a nicer space elsewhere.
But, if you do plan on renewing, PLEASE DO IT RIGHT. Having representation in a renewal is so important in today’s market, and here is why.
Imagine yourself as a new tenant moving into your space. Would you be ok with space that hasn’t had any improvements in the last 10 years? Would you be ok with old lights, old offices, old carpeting, etc? Wouldn't you expect a potential demolition and remodeling of the space from the landlord? Wouldn’t you want a free rent package for the price you are paying on prime New York office space? Well you should, because a new tenant would surely get these concessions.
Landlords these days spend hundreds of thousands of dollars, if not more, on remodeling spaces after tenants leave. Not to mention the rent they are not collecting during the time it takes to do the work. And this is assuming someone leases the space immediately after you, which is not always the case. By renewing, you save landlords a TON of money.
So why don’t you deserve any of this? You may have been content with your space for the last 10 years, but you are entitled to so much, so why not take advantage?
Additionally, there are so many things to negotiate on a renewal, besides the work and free rent. Think about escalations, taxes, making sure the space is up to the current code. This would all be reset and taken care of for a new tenant, so why not you? In fact, the landlord would rather you! If you are being offered a renewal, that means they are happy with you as a tenant!
Negotiating a renewal is a full time job, just like moving is. So make sure you have someone in your corner who does it full time.
Anyone can show you a space.