So it’s that time. Your lease is about to expire and you have a decision to make on whether you renew your current space or take your business elsewhere. Both options have their pros and cons, so how do you know whether it’s time to stay put or relocate? There is no blanket right answer, as a commercial move decision is completely unique to your business. Not to worry though, we have put together a list of pros and cons for you to consider and prioritize in order to help you make a more informed decision.
|Business Continuity||Building Depreciation and the Impact on OppEx|
|Familiar Environment (you and clients)||Outdated Accommodations|
|Cost Savings||Overpay Potential|
|Tenant Improvement Allowance||Settle vs. Custom|
Lease Renewal Pros
You’ve got a business to run. Taking time out of your day to see, evaluate, and plan for a new space takes your focus away from normal business operations and can drastically affect your bottom line. Renewing allows business to run as normal without as much as a hiccup.
Familiar Environment (For you and your Customers)
Your employees and customers get comfortable in your location, space, and overall feel of your building, especially if you have resided in this location for an extended amount of time. The ability to keep right on with those feelings is a big advantage as there are no adjustments to be made by both those two very important parties.
Cost Saving Opportunities
Your landlord doesn’t want you to go. Through careful lease renewal negotiations, you can drastically reduce costs and add a large percentage of your operating expenses to your bottom line.
Keeping on with the fact that your landlord doesn’t want you to leave, they will often give you an allowance to customize and upgrade your current space. They do this to avoid vacancy costs that you leaving would force them to endure.
Lease Renewal Cons
Building Depreciation and that Effect on Operating Expenses
Buildings depreciate and green technologies become outdated. Everything from electrical wiring to other key infrastructure pieces may be adding thousands to your operating expenses as these wasteful designs cost more to operate.
Staying put in an older building may make you forego newer accommodations that were mainstreamed after your current occupancies construction. This can be a big problem when looking to allure or retain top talent if your competitions workspace boasts these upgraded amenities.
Without skillful negotiations, your landlord will more than likely attempt to extend your current lease into the next term. This sounds easy and fair, but since the time you negotiated your last lease, the building has depreciated and its position in the market has changed. Be aware of this, and be sure you are getting a fair price.
Settle vs. Custom
Chances are that your business has changed a bit since you moved into your current space. With that said, so have your needs in terms of space, culture, and access to new amenities. Staying put can potentially “work” but it won’t be a space fit for your new needs.
|Modern Building and OppEx Reduction’s||Time is Money – and this takes time|
|Encompasses all business needs||Custom build out Cost’s|
|Cost savings||Cultural adjustment for you and clients|
Commercial Move Pros
Modern Building and OppEx Reductions
Moving will allow you to capitalize on a modern building and modern infrastructure. Most modern infrastructures have “green” technologies and are better for not only the environment but also your bottom line.
Encompasses all business needs
Since your business needs have changed over time, moving gives you the opportunity to check all those boxes and find the perfect space to accommodate your newfound needs.
Moving gives you the opportunity to capitalize on government and other economic subsidies that can save you thousands from month to month. Skilled research, market awareness and negotiation skills will be your best friends as you go through this stage.