The Brexit might be disappointing. It might even be a bit scary. But it is not likely to harm your company in its role as a tenant. (In fact, unless you have extensive operations in the United Kingdom, it is unlikely to harm your company at all, and it could make it easier for you to negotiate better lease terms on future deals.)
Recently, the population of the UK voted to leave the European Union. While the vote is technically non-binding on Parliament, it appears, as of the writing of this post in very late June, that the UK will be leaving the EU at some point in the future.
The impacts of the Brexit on the UK are likely to be far reaching. The pound has lost significant value and British stock markets have also plunged. Over the longer term, Britain is likely to find it harder to trade with European countries.
The Brexit's impact on America, though, is likely to be largely positive. As Britain and Europe become weaker, America gets stronger. This also means that the American dollar increases in power and that the US becomes an even more attractive place for risk-averse investors to park their capital.
While it's unlikely that the overall universe of landlords for US property will change significantly as a result of the Brexit, any change in the world order can make investors more skittish. That skittishness is what creates opportunity for tenants with vision to improve their lease terms.
Put yourself in the shoes of your landlord. The world continues to get more complicated and less safe. If he or she has international holdings, he could be looking at lower property values and the potential for higher vacancy rates as other economies suffer. If you are in a position to renegotiate your lease terms, you can capitalize on this fear.
You are safe. You are already a tenant of the building that you occupy (this might seem obvious, but it's important to remember). You've been paying rent on time for months, if not years. You've proven the soundness of your business. If you were your landlord, wouldn't you want you to stay in the building?
Based on this argument, now is an excellent time to reach out to any landlord of a building in which you wish to remain. Let that entity know that you are open to extending your lease and giving it more stability, and see what kind of lease terms you can negotiate. It won't cost you anything to ask, and you could save a great deal of money over time.
Other great office lease articles to take a look at:
Subscribe to our blog for great CRE articles!
