As you probably already know most companies in 2016 will choose to renew the lease rather than move. The cost, disruption and downtime in relocation is substantial, and this makes it something that companies will only do when they have to, not when they just feel like making a change. That being said, many corporate leaders are now stymied with the prospect of decision making in 2016.
As you probably know from looking at your 401K, the year 2016 has started off as the worst year on record for the stock market in many decades. So what is that telling us about a company’s ability to make major decisions— those decisions about growth, about hiring new employees, about new equipment purchases —and yes, about renewing the lease?
When in doubt, most companies will follow a path of least resistance. They instinctively choose to delay the major decisions until the “time is right” or rather until they have a clear direction of their business revenue prospects. Real estate decision making is clearly in the major decision category, as real estate operating expenses are the second largest expense most companies experience, right behind the costs of personnel. So, choosing wisely is critical.
Making long term decisions in tough times is nothing new. Companies have been wrestling with this problem for about a decade now since the big crash of 2008. For we small and medium sized businesses that have survived, a certain pattern of success has emerged, and we have been able to some degree to meet our projected base revenue targets, and thus have some degree of confidence that we will be able to make it in this sluggish economy without the help of anyone.
So, what should you do when it comes time to renew the lease in 2016? When everyone around you is panicking it is time for calm reflection. Simply put, this is the time to lock in a low rent for long term. Landlords, sensing the panic, are charging a huge premium to making short term one year lease decisions. Your friendly real estate advisor can show you effective strategies to create flexibility within the structure of a long term lease.
We at Dickstein Real Estate Services create the right competitive environment to incentivize the Landlord to compete for your business while showing ways to create effective strategies with short term flexibility in the face of long term leasing decisions.
Quite simply, we understand the needs and motivations of our tenant/clients and are able to develop and implement effective negotiating strategies to achieve the outstanding results our customers have come to expect. By the way, there is usually no charge for our services as these costs are already structured in the deal!
Want to find out how? Call us today for a confidential appointment to learn why, “OUR DIFFERENCE IS YOUR ADVANTAGE”.