New trends in office design and workforce habits may have brought you to consider reducing the amount of office space that you occupy. A smaller office space can reduce costs dramatically. Unfortunately, lease terms like your expiration date and the requirement to pay rent for the entire space might stand in your way. However, there are ways around this problem. Here’s how to shrink your office space:
Step One: Get a Space Planner
Whether you're going to be moving to a new space, retrofitting your existing space, or simply lopping off a part of it, the first step is to identify what you need. A space planner can help you estimate the amount of space you will need to operate in a smaller office. If you plan to work with your current space, the planner can help you determine where you can split space off from your existing office. He can also help determine what type of improvements you might need to do. If you need to turn a maze of private offices into a large open work area with multiple conference rooms, enlist a Space Planner’s help. Need space planning tips? Check out the 5 Facts You Need to Know Before Changing an Office Layout.
Step Two: Get a Broker
Just like a space planner, a broker can help whether or not you're moving. If you know that you will be able to move soon, he can help you find new space. When you plan to stay, the broker can be even more helpful. If you want to abandon your lease, he might know what deals your landlord works out with other tenants in your situation. Sometimes, a broker can find a tenant that will take over your entire space. He can also help you assess the sublease market and determine the appropriate rent and lease terms before listing your space.
Step Three: Review Your Lease Terms
Once you've put your team in place, it's time to review your lease. The most basic lease terms to read are your expiration and notification dates, since they tell you when you can get out of your arrangement.
However, there are a few other lease terms to look at:
- Early Buyout Clauses: Some leases have clauses that allow you to buy your way out of the lease.
- Assignment and Subletting Clauses: These clauses define what you need to do in order to turn your lease over to someone else or to find someone to occupy your space and pay you rent.
- Landlord Defaults: Another way to get out of your lease is to prove that your landlord hasn't met his obligations. Review the lease terms carefully to find out what constitutes a landlord default and how you can take action.
- Multiple leases: If your space is made up of multiple spaces joined together, you might be able to hold on to some, and buy your way out of other parts.
Step Four: Negotiate With Your Landlord
Your lease terms explain your legal obligations. However, if you speak to your landlord, you’ll be more likely to work out a deal that satisfies your company’s needs. If your landlord needs your space to provide an entire floor to a new tenant, he might be willing to work with you. He may also be willing to move you to a different space in another building he owns. On the other hand, he could also be open to a buyout if he needs near-term cash. The only way to find out is to ask. Want more tips for cutting costs in your office space?
Top image credit: Inquire Magazine
Here are a few other articles you might enjoy:
Subscribe to our blog for more CRE tips!!
