Our agents at Beck-Reit Commercial are always happy to look over our clients' current leases before they elect to "Extend" per their lease.
Often, lease extensions are negotiated with initial lease terms of 5-10 years before the extension comes into play. This can definitely work in the tenant's favor when they lock in super low rates. We often advise our tenant clients to lock in the longest lease they can to get the better negotiating power - both in terms, rental rate, TI Allowance etc.
When it is time to exercise an extension, a Tenant should review it, as there may be some negotiating room. For this client at Post Oak Center, we were able to negotiate a TI Allowance to "Freshen" up space and reduce Rental Rate a small amount.
Depending on the Landlord, negotiations can take 2-8 months. We suggest lease review 12 months prior to the end of the term. It is never too late though, we have worked with clients that negotiated lease extensions right up to the date that the lease was set to extend. The first step is communication with the landlord.
Here at Beck-Reit Commercial, we work towards a win-win situation during all negotiations.
POST OAK CENTER - Medical Office Lease
Advice to Tenants:
"Tenants should remember to always engage an experienced commercial agent then communicate with the landlord next in order to ensure a win-win situation for both the tenant and the landlord during times of negotiating lease extension. ” - DeLea Becker
Advice to Landlords:
Look for tenants that will stay and pay. Getting the highest Base Rent Rate isn’t the #1 goal, we suggest looking at the longevity of tenant and their current financials.
For additional guidance on Lease Negotiations and Extensions contact DeLea Becker