An increase in flexible workspaces hasn’t led to the death of the CBD office as predicted.
However, offices that were traditionally used 5 days a week are now being re-considered as part time spaces that serve a different purpose.
As they return to the office, employees are no longer looking for just a desk and a boardroom. They need a space that will re-enforce the social connections pivotal to daily work. Furthermore, the office’s role in brand positioning is vital as many companies attempt to bounce back after a year at home. This fresh take on the office space, while exciting from a workplace point of view, will have significant implications for occupancy rates, as commercial tenants begin to re-assess their property strategies.
For these tenants, this has uncovered many opportunities to leverage their negotiating power with their landlord. The pandemic has impacted both tenants and landlords, and both find themselves needing to re-think their property strategies for the next few years. BRM’s position has always focused on strengthening tenant-landlord relationships. Negotiating your lease is a necessary part of this relationship and it can be done in a way that leads to fair outcomes for both parties.
Common situations where tenants feel they need assistance navigating their property situation include:
BRM has compiled some key questions for commercial tenants that will allow them to better understand their leasing situation and use their negotiating leverage to achieve their property objectives.
1.Is your building in a desirable location?
-Look at key factors like proximity to public transport and commute times. These factors will help you understand how easy or difficult it would be to replace you.
2.Is there demand for this type of building?
-Understanding supply and demand for your type of building is important, especially if it has been impacted by remote work
3.What is the tenant mix like in your building?
-Landlords are always looking for a stable tenant base. The pandemic has impacted the leasing position of many commercial tenants. If your landlord is facing the risk of losing other tenants in the building due to COVID, this can put you in a better position to negotiate.
4.What is the quality of your building?
-Competition for talent is fierce right now. Companies want to lure their people back into the office by rewarding them with a great workspace and they recognise that now is an opportune time to upgrade to a higher quality building for a great price. If your building has structural issues, is outdated or doesn’t contain features that promote health and safety, you are in a position to negotiate on various matters if you choose to stay.
5.How flexible is my landlord?
-Commercial landlords have been hit particularly hard by the pandemic. Rising vacancy rates mean that landlords are finding new ways to be flexible with their tenants and reach agreements that will lead to positive outcomes for both. Your landlord may be more likely to invest in their building or offer increased incentives so that their asset’s ongoing income is maintained until the return of a stronger market.
6.What value do you bring to the building as a tenant?
-You may have a larger footprint than other prospective tenants, or your company’s values may be in line with those of other tenants in the building. It’s a good idea to understand what value you can bring to your landlord and how you can use this to negotiate better terms.
Leveraging your negotiating power is a fundamental part of your property strategy. Whether you want to renew your lease or find a new location, make sure that you maximise the opportunities available to you as a commercial tenant in today’s market.
BRM's Property Team is here to assist you with any questions you have about your current leasing situation.
Contact us for a free chat today
Sign Up To Our Newsletter