Renewals in commercial leasing can be almost as important as securing a lease in the first place. There is quite a bit of finesse to this process.
First piece of advice: don’t leave it up to your landlord or property manager to remind you about an upcoming renewal. Print off your critical dates for rent escalations, expiries, notice periods, etc.
Keep those dates handy and update whatever calendar system you utilize to remind yourself well in advance of them coming due.
Outlook is especially helpfully for this, as it allows you to pin a date/time and set a reminder notification as far out as necessary.
Another good way to alert yourself is by redundantly adding those dates into your phone calendar.
As the tenant, your best first step in a renewal negotiation will start with you initiating it.
Whether a market is up or down, it’s important to seek comparable vacancies before signing on the renewal dotted line.
Commercial real estate brokers work not only for landlords, but we also represent tenants in renewals.
We are your best third-party resource to suss out the “best” deal being offered.
This isn’t just about the rate, it’s also about the potential costs of moving such as fixturing a new location. We can help you do that math to see if it’s worth it.
Time is ticking
If you’re renewing your lease as part of an option to renew your lease, don’t wait too long.
Options such as this will typically have a time period during which you must notify your landlord of your intent to exercise.
Tenants should realize triggering their option places an obligation on them to negotiate terms with their landlord. If they want to stay, they need to be upfront and notify accordingly.
However, we often get tenants who know their option notice period is coming up and they half-heartedly identify a desire to stay. If they find something better, they will state they hadn’t really triggered the option so they aren’t bound to it and can move on.
Unfortunately, a wishy-washy notification can also come back to bite tenants. If the tenant doesn’t notify correctly but then decides they do want to stay after their notice date has expired, their landlord may have already found another more desirous tenant.
There can be a bitter battle if the tenant truly wants to remain but hasn’t properly set forward their intentions.
There could also be instances where it benefits the landlord if you leave.
My bonus advice is this: tenants, and sometimes landlords, can hit snooze on a renewal and forget all about it.
Don’t be that guy or gal.
Make sure you get your renewal in writing, otherwise you are effectively entering into a month-to-month tenancy.
– Kelly Macsymic is a business manager with Stuart Commercial Inc. and a sales associate with ICR Commercial Real Estate, Saskatoon.