In industrial real estate, a lease renewal may seem like a simple ‘yes’ or ‘no’ decision, but there are several key factors you need to consider before locking in for another term. Like with any lease management decision, you must take an honest look at how the space is serving your business in its current state, along with where it fits into your growth plans. Does the space up for renewal match your current green initiatives? Are the terms and conditions of the lease still agreeable or do you need more favorable terms in order to stay?
Let’s take a closer look at each one so that you can make the strongest decision possible for your portfolio.
The Space – Does it Work for You Now?
When considering if a lease is worth renewing, you should begin by reviewing how the space fits into your company’s current outlook. There are many ‘fits’ you need your building to have – size, location, layout and so on. Some of these aspects can be adjusted while others cannot. If you need to redesign your layout to make the space more efficient, often your landlord will be open to working with you. If your current location is no longer feasible from a shipping and receiving standpoint – you may be forced to move. Of course, it is important to ask yourself if the space will be able to grow with you over the next lease term or if it will hamper you.
If a space no longer serves your needs, it is worth exploring other options.
Seeing and Staying Green
Green initiatives provide multiple positive benefits for organizations. You are able to stand out among your competitors as a champion of the environment, proving that profitability and stewardship are not mutually exclusive. You are also able to return dollars to your bottom line through reduced utility costs.
Whether you had these initiatives in place at the beginning of your lease or adopted them later on, it is worth considering if this industrial real estate fits with your environmental goals moving forward.
If you will not be able to outfit your building with everything needed to reach your goals, it may not be worth a renewal. However, you may be able to flip this to your advantage by negotiating more favorable terms. If you are not able to attain more favorable terms on a lease in a building that is already not ideal, it may be best to search elsewhere.
A Fair Deal
As a tenant in industrial real estate, you provide value. You are a dutiful occupant who not only pays rent but also may be tasked with some minor upkeep on the property such as snow removal. You are well within your right to expect the same of your landlord. If your landlord does not adhere to the maintenance requirements within the lease or is unresponsive when you reach out with questions or concerns regarding your space – take your money elsewhere.
Your company deserves to work with a property management partner who will work as an extension of your team.
Your Partner in Lease Management
Scribcor provides industrial lease management services you can count on. From lease abstraction and reporting to rent and utility pay, you can fully off-load your lease management so that your team can remain focused on the big picture in order to realize your goals.
Reach out today to free yourself of the paperwork with a trusted lease management partner.