This article are provided for information purposes only, and are not intended as legal advice.


Business strategy – renew or extent your lease?

May 4th, 2009

If you are in a building where many tenants are leaving and there are many vacancies, do you approach our landlord for a reduction in rent?  If you are a small tenant, the landlord may not want to negotiate with you, especially if you have been a problem tenant in the past.  However, someone paying some rent is better than no one paying.

 

If you are large tenant and you are part way through your lease, do you ask the landlord to reduce the rent in exchange for extending the lease.  The deal that you can cut will depend on many factors, your landlord’s overall occupancy rate, the specifics of your lease and your flexibility.  If you want more space or less space.  Maybe the landlord will reduce your rent if you are prepared to sign a long term lease.  They may be able to reduce your rent for say 5 years after your current lease expires and blend that with your current rent to effectively lower the monthly payment. This allows you to get a rent more consistent with the market and your landlord has a long tenant which helps them with their own financing or future vacancy.  A wise landlord will want to make sure the tenants are happy because if you are not, you will move when your lease expires.

 

 

The question is do you talk to your landlord now or wait closer to the end of the lease?  if your landlord has a high vacancy rate, sooner may provide you more opportunities than later.

 

 


Filed under: Business strategies — Gary Landa @ 5:42 pm


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