Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

<b><i>In The Spotlight: </b></i>Strategies in Tenant Office Lease Renewal Negotiations

By Doug Damron and Elizabeth Cooper

As tenants reconsider and update office space needs, it is imperative that they proactively develop a strong renewal/relocation negotiation strategy to maximize their future rights and benefits. Tenants with expiring leases are often faced with enormous improvement costs; concerns about productivity loss; aversion to change; lack of market knowledge/leverage; and unknown out-of-pocket costs of a relocation or renovation of space. Furthermore, as they are considering what space is right for their future, they face serious concerns over planning for what could be a five- or ten-year financial commitment. Unfortunately, many tenants wait too long to focus on space needs and assume their lease will be renewed on reasonable terms. If a tenant waits until its notice period is upon it before it assesses its needs and develops a strategy or looks at the renewal rights in its current lease, it may become a 'captive tenant' forced to negotiate from a weakened position in the market.

Tenants need to avoid the captive tenant syndrome by considering a real estate strategy well in advance of their lease expiration. Hiring a tenant broker and focusing on possible leverage with a landlord is the best strategy in defense of becoming a captive tenant. Landlords are concerned with lease-up time, high tenant improvement costs, credit risk, their ability to refinance and any impact on liquidity that results in losing a tenant in their buildings. A tenant's ability to leverage these concerns effectively in a negotiating strategy will benefit them financially as well as mitigate future risk. Below are four essential considerations for companies tackling a real estate renewal.

Start Early:
The Process Yields Beneficial Results

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Bankruptcy Sales: Finding a Diamond In the Rough Image

There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.

Judge Rules Shaquille O'Neal Will Face Securities Lawsuit for Promotion, Sale of NFTs Image

A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.

Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It Image

Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?

Blockchain Domains: New Developments for Brand Owners Image

Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.

Coverage Issues Stemming from Dry Cleaner Contamination Suits Image

In recent years, there has been a growing number of dry cleaners claiming to be "organic," "green," or "eco-friendly." While that may be true with respect to some, many dry cleaners continue to use a cleaning method involving the use of a solvent called perchloroethylene, commonly known as perc. And, there seems to be an increasing number of lawsuits stemming from environmental problems associated with historic dry cleaning operations utilizing this chemical.