The 5 Smartest Corporate Real Estate Goals For Protecting Office Tenants In 2018
By: Carrie S. Holstead
It’s a new year and a perfect opportunity to establish corporate real estate goals for 2018. Below I reveal the 5 smartest goals for protecting office tenants.
1. Think like an executive
Executives know that corporate real estate is typically the second largest line item in the corporate budget and overspending on this line item will result in the need to cut expenses elsewhere to balance the budget.
2. Start the lease analysis process early
The optimum time frame for starting the lease analysis process is typically 18 to 24 months in advance of your office lease expiration. For large tenants considering anchor tenant opportunities in proposed downtown buildings, more time is required.
3. Introduce competition for your tenancy
Professional landlords conduct negotiations on a daily basis while tenants typically consider lease options every 5 to 10 years. A qualified tenant representation broker will know the terms offered by the current landlord’s competitors, and the simple presence of an experienced broker will signal that your company is considering relocation, prompting more competitive terms from the landlord.
4. Avoid conflicts of interest
If your company needs an attorney, will you hire the same lawyer as the company against whom you file suit? Of course not! Yet surprisingly, some companies still enlist a tenant representative whose firm is already obligated to act in the best interest of the landlord. This is known as dual agency and is very beneficial to the tenant representative’s company which receives a double commission. However, dual agency is costly to tenants which give up the benefit of having an advocate.
5. Know how the new accounting rules for office leases can destroy your balance sheet
There are four words that if used in your office lease will easily add hundreds of thousands of dollars or more to your balance sheet. Know what they are and how to avoid a costly mistake. For additional information, contact my firm.