8 Quick Tips for Your Upcoming Office Space Renewal

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If your office space lease is coming up on its renewal date, you have a lot to consider. Should you stay? Move? Shrink? Expand? Renegotiate? Change markets? While the best way to manage the process is to sit down with your tenant representative at least two years before your renewal date, here are some tips and some questions that you can consider as part of your decision making process.

Benchmark your space. Before making any decisions, see how your space ranks relative to other locations in your portfolio. Are you using it? Is it productive? If so, it's probably a keeper. If not, it might be time to consider a relocation.

Consult your strategic plan. A space in Phoenix doesn't make much sense if you know that you'll be pulling out of the Southwest. Conversely a too-big space in Birmingham might be the right size if you plan to expand in the Deep South.

Look for sublease office space. If you are going to move -- especially to a new market -- consider sublease space. The leases are usually shorter and you can frequently get great pricing. It's an excellent way to get your feet wet in a new location.

Remember the two magic equations:

Small Spaces + Expansion Rights = Big Spaces. If possible, look for a small space with the rights to expand into adjacent spaces. That way, you only pay rent on the office space you use today but have the ability to.

Short Leases + Options to Extend = Long Leases. There are two ways to get ten years worth of occupancy. One option is to sign a ten year lease. The other is to sign a five year lease with a five year option to extend. The latter might cost you a little more over ten years but, if you choose to move out after five years, it will save you a whole lot of money.

Other Considerations

Start early. If you start the negotiation process with two years to spare, you'll have more than enough time to leave the table and let things cool down if they aren't going well. Your landlord will also know that you have a long time to find a better option.

TIs and free rent are for renewals, too. If your landlord spent a bunch of money to move you into your office space, what would she spend to hold on to you? When it comes renewal time -- even if you're taking an option -- ask your landlord to sweeten the pot. She might surprise you.

Millennials love 18-hour cities. You should, too. If you're looking for a dynamic location for your next office space, look beyond the usual suspects. New York, San Francisco and Chicago are still great places. However, Gen Y workers also love Portland, Minneapolis, Austin and Tampa. Many offer great work forces, good quality of life and refreshingly low occupancy costs.

Staying is frequently cheaper. Finally, before you rush out and look for a new space, step back and really consider the cost of moving. Even if you save a few bucks in rent, the cost of moving, downtime and the other ancillary costs of a move might add up to more than you expect.