EXTENDING OR RENEWING
YOUR LEASE
For many years, a lease renewal
was a fairly simple procedure - a little give and take on both parts. The Landlord would want to increase their
rental income and the Tenant would typically agree, rarely asking for improvements to the leased space (such as paint or new
carpet).
Today it is customary for a company to hire a Tenant
broker to handle the negotiations for their lease renewal. There are a number of good reasons for this. The owner
of the property knows that you do not negotiate leases in the course of your daily business activities and expects a certain
degree of market naivete on your part. They also know that the easiest move for you to make is no move. Most
often the offer the Landlord makes to renew a Tenant's current lease is not as attractive as the offer the Landlord would
make to lease the same space to a new Tenant. Unless, the Landlord is faced with the potential of losing your tenacy,
or that you have professional representation, they will not be inclined to offer a market deal.
Market Review: To accurately determine what the fair market renewal rate and market
concessions are, it is necessary to work with a broker. This may include physically looking at competitive properties,
attaining actual proposals and will require that your broker researches comparable deals in the market. As your broker.
Fidelity will contrast this information with the requirements of your company and provide insight on what we expect to achieve
in your lease renewal negotiations. Renewal negotiations are often an excellent opportunity to request changes or modification
to the services you receive from your Landlord.
Bring Your Lease Up To Date: As your lease ages, a number of conditions may have changed in the market.
It had become more important to obtain a non-disturbance clause in the event of foreclosure. There are also new environmental
issues which you may want to address. Often tenants renew their lease without changing their operating expense base.
This can prove to be a very costly oversight.
There
are many issues that a Tenant needs to be aware of during renewal negotiations. When you
hire Fidelity we will not only improve the financial terms of your lease, but also help to protect your leasehold interests.
