When time is running out to rent a commercial space | RENX

Lease expirations are climbing much faster than most tenants anticipate.

Committing to a five-year term may seem like a lifetime for a company, but that timeframe is getting longer in the blink of an eye.

For a tenant considering renewing or triggering a renewal option, it is best to take care of this impending task early.

A tenant without a renewal option can approach the landlord at any time to begin early renewal.

Part of this strategy, for the tenant, is to catch the landlord before they start marketing the space. The tenant may be in a good position to negotiate their best terms before the landlord has to try too hard.

Tenants with a renewal option should be aware of the notice trigger date. Unless there is a conflict, there is nothing to say that a landlord would not renew after a renewal notice expires, but they are no longer obligated to do so.

For tenants investing heavily in their tenant improvement, this could prove to be a risky mistake.

Tenants back in the corner

Tenants considering moving often ask how much time they need to plan ahead. Sometimes business owners don’t want to end up paying rent in two places, so they put off that task until it’s too late.

Tenants must allow at least a one to two month window between the offer stage and signed lease and then possession to secure a new location.

Summer months may take longer to respond to offers if makers are on vacation. The same goes for school holidays, as many people choose to take their holidays when their children are away.

The world is hyper-connected but that does not mean that everyone wants to work while on vacation.

The listing agent should know the reasonable time frame for an expected response on any ad, so it is best to ask them what is feasible.

This assumes that the market is available, which our current industrial market, for example, does not have.

Therefore, budgeting for overlap on locations may be necessary to ensure that there is no business disruption.

Build in build time

Municipal approval for any new improvements can take much longer than expected. Between the contractors quote and official approval, this process can take several weeks before work can begin.

Asking a landlord for a layout or a rent-free period may be necessary. However, in a market where stocks are low, they may not be willing to trade long lead times for either of these things.

Proper budgeting of all potential expenses and planning time will put tenants in a much safer position to open their doors for business.