As you approach the end of your lease term, you will need to evaluate whether to stay and renew your commercial lease or negotiate a new lease and relocate.
Staying put could mean savings in terms of fit-out and relocations costs. It may also mean you're not inconveniencing staff or clients/customers with a change of address.
But relocation could mean better quality premises, location and rent savings (amongst other things), allowing you to foster team culture and adapt to new ways of working.
There are several steps involved when undertaking what we call a ‘Stay vs Go’ analysis and evaluating the best option for your business. To help, we’ve shared our 9-step process with you below:
Does your premises meet the future needs and growth of your business? Ensure that your real estate decisions align with your business plan.
How much space is enough? An architectural or design firm can help develop an overall program of your space requirements for an existing or new space.
Using aesthetic, quantitative, and qualitative criteria, evaluate whether renewing is a viable option. Is it possible to expand if you reconfigure your existing space?
Research the market for a new space that will suit your criteria and overall business needs. When comparing options, consider:
Evaluate what your landlord will face if you move out – potential downtime, transaction costs like construction and tenant fit-out, rent concessions and commissions. This will allow you to negotiate better terms if you stay and renew your commercial lease.
Calculate the savings you would achieve by renewing your commercial lease versus a relocation. This could include not paying upfront construction costs, new wiring, and furniture systems. Consider any available incentive contribution from your current landlord toward installation upgrades.
Calculate your breakeven point where relocation is more advantageous than renewing. And analyse comparable market transactions to determine the best possible terms in the open marketplace.
Based on the outcome of your sensitivity analysis, submit proposals to your current landlord and the landlords of potential relocation site/s. In your proposals, reflect the breakeven calculations and market comparable transactions.
Utilise the cost information and market intelligence you’ve gathered across all relocation and renewal options to establish a competitive process amongst your current and potential landlord/s and complete the transaction from a position of strength.
If you don’t have the resources or the time to go through this process yourself, we can work with you on your Stay vs Go project strategy to create the greatest leverage. While it means extra work for us, the savings make it worthwhile!
Get in touch with a member of our team today to see how we can help you.
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We acknowledge the Traditional Custodians of the lands on which we work. Our offices are located on the land of the Gadigal peoples of the Eora Nation and the Wurundjeri peoples of the Kulin Nation. We acknowledge their continued connection and contribution to land, water and community, and pay our respects to Elders past and present.
We’re proud to be an inclusive workplace, where diversity in all its forms are valued and every member of our team is encouraged to bring their whole self to work.
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