When your commercial lease expiry is approaching there are many considerations as a business manager/owner. Your workplace can be more than just your business address. It can be a powerful tool through which you can leverage productivity gains, positive shifts in organisational culture, lift employee engagement levels and an environment where clients and your people can achieve great things together. A quick or ill-considered decision will deprive you of these benefits and cost your business for years to come.
To achieve the maximum benefits for your organisation it is important to consider all the factors well in advance of the lease expiry event. However, many people don’t realise is that there are far more options available, other than a simple “STAY” or “GO” decision and each needs to be considered in partnership with your business strategy.
We’ve outlined below a high level characterisation of each option:
|RENEW LEASE AT EXISTING PREMISES||
|RENEW LEASE & UNDERTAKE FITOUT REFURBISHMENT||
|MOVE TO AN EXISTING BUILDING & PROCURE A NEW FITOUT||
|MOVE TO EXISTING BUILDING WITH EXISTING FITOUT||
|PRECOMMIT TO A NEW BUILDING||
Excerpt from the PCG Guide: Relocating Your Business
WHAT ARE THE NEXT STEPS?
With so many options to consider, how do you ensure a successful outcome for your lease expiry?
You can start out with these top 3 steps:
- Review Your Business Strategy - Now is the time to review your business strategy and ensure you are clear on what space and financial requirements you have for your Corporate Real Estate. Is your organisation expecting to expand? Does your organisation want more flexible hours? Will you be rebranding and need a workplace that matches your new marketing communication and corporate brand? Could downsizing be in your future? Does your current workplace enable the business in terms or attracting or retaining talent? Expectations of how the business will perform in the future should be considered as you determine if your current workplace is truly the best option.
- Allocate Staff & Resources - Analysis of your commercial lease options should not be done in a vacuum. Key roles including CEO, CFO, COO, Facilities Manager, Office Manager and Human Resources need to work together to envision your optimal solution. Only then go to the analysis, procurement and negotiation of a future lease. Establishing a committee and head of committee to manage the project with a clear timeline will help you manage the process without falling short. Needs analysis, researching potential properties, site inspections and financial analysis and lease negotiations can take considerable time and it is important your organisation is set up and prepared for these extra uses of time and resources.
- Education - The Commercial Real Estate Industry, like many others, has its own vernacular and methodologies. Ensure either yourself, or your team members are educated on the condition of your local market, (be it tenant or landlord driven) and the subsequent implications, contractual terms and negotiation points such as market rates, lease conditions and incentives to make sure you come out a winner. Companies who have neither the time nor resources to do this competently, engage an independent expert (tenant representative) to work with them through this process.
The opportunities and risk of your commercial lease expiry form part of our PCG guide Relocating Your Business.
Are you keen to prepare your organisation for an upcoming lease expiry? You can download the full guide right here.