Outsourcing Your Company’s Lease Renewal to a Corporate Real Estate Advisor

Renewing your company’s lease can often be a time consuming task, requiring a big commitment on the part of a corporate real estate team.  For companies with a large amount of properties, the challenges of managing the ongoing lease renewal processes can drain resources that would be better directed towards catering to their real estate portfolio.

Large companies will most often manage the real estate lease renewals process themselves, assuming that lease renewals are quickly negotiated and inexpensive when managed by in house personnel, and that outside brokers will slow the process and add a cost.  But if a company factors in the time for each negotiation, including internal staff discussions and meetings, research into current market values per location and the back-and-forth with the landlord’s agent, a corporate real estate team will quickly find itself extremely busy with a task they thought probably would be a quick and easy negotiation.   When the team’s time is focused on lease renewals, the team is unable to focus on higher corporate priorities like strategy, acquisitions and dispositions.

Companies often discover that time dedicated to lease renewals is better spent on strategy and counting on a trusted outside advisor to renegotiate the lease to free up internal personnel resources for maximum corporate benefit.

Choosing the Best Partner

Companies outsource work all the time.  Whether it is for accounting and administrative support staff or janitorial and foodservices, the company is able to accomplish their goals without sacrificing internal staff on a time-consuming project.

Lease renewal is often a time-intensive process that may also be managed by an expert to avoid incurring unnecessary costs at each renewal.  The challenge is even greater when spread across dozens, if not hundreds, of locations per year. Managing each location’s renewal can become all-consuming.

When renewing a lease for a specific location, the best outcome is a commercial lease agreement that utilizes the leverage of the firm and other market opportunities for relocation, maintains a positive relationship with the landlord, provides flexibility for the future, and includes incentives or value-add for necessary or cosmetic upgrades, or reduced rent.  Companies want each lease renewal handled with care to a favorable result, so finding the right trusted advisor is a critical success factor.

Although each lease renewal situation is unique, the right outside partner should meet specific criteria, including experience in the commercial market, good communication and diplomacy skills, have the ability to present all reasonable options to the company and recommend the best strategy to move forward.  The partner should also posses the analytical skills to compare lease versus lease options and leave versus buy options.