No one likes to think of negative outcomes for their business, but the fact is they happen. So why not reduce your possible costs ahead of time by using this checklist for negotiating an office lease termination option.
Point(s) of termination
Are you comfortable with a one-time termination date or would you prefer to have multiple points that can be exercised at different times?
How much time prior to lease termination do you have to give the landlord? When negotiating think in terms of how fast would you need to get out if the worst case scenario happened.
Lease termination fees
You probably won’t be able to negotiate an office lease termination option without fees, so the goal should be minimizing them as much as possible. Also, be sure to look up the state laws about termination fees so you are not locked into ones you normally wouldn’t be required to pay. Try negotiating for credits for things such as improvements to the facility and at what rate those improvements will be rated. When will the fees be due? Upon the termination date or after assessing the property?
Discount after office lease termination
If receiving a discount for a certain length of lease, be sure to negotiate how that discount will be handled during termination. Some lessors may try to charge an additional fee to recoup the discount.
If leasing a location which does not require a specialized build/renovation, see you can negotiate lower fees since the space should be easier to lease in the future.
Try to negotiate additional credits for items such as prepaid utilities or other location based services.
Remember, the time spent negotiating now is money you won’t have to spend later. Businesses should retain a tenant representation commercial real estate broker to negotiate the office lease termination option and to guide them through the office relocation or lease renegotiation process.
At Golden Group Real Estate, we specialize in tenant representation real estate services for office space users in the Chicago area, helping local business owners find office space and negotiate lease and purchase agreements. We never represent landlords, so we are prepared to negotiate aggressively on behalf of our tenant clients.
For more on Golden Group Real Estate, read about our real estate services. Let us know if we can help you find office space for rent or buildings for sale. Call us at (630) 805-2463, email us at firstname.lastname@example.org, or enter your office space search criteria below.