While recently reviewing a client's lease, it occurred to me that office and distribution center expansion are probably the leading reason commercial leases are renegotiated prior to the planned expiration date.

How often have we, as consumers, felt like the Seller has us "over a barrel" as a result of an extenuating circumstance that places us in a less than desirable negotiating position?  In my case, it was turning in a leased auto early.  Somehow I convinced myself that I would only drive ½ the number of miles than I had historically driven my car year after year. Let’s put it this way.  The salesperson could have told me that my new Chevy was a bargain, in spite of the monthly payment that would have allowed me to comfortably drive a new Bentley, and I could only smile.

Too often, business owners and managers seem to concede that they’re over the proverbial "barrel" when their business requires an expansion of its office or warehouse well in advance of their firm’s scheduled lease expiration date.  This can lead to unnecessarily paying more rent under highly rigid lease terms. 

Leased facility expansion is an opportunity to renegotiate an existing lease and improve upon terms originally negotiated.  It’s also an opportunity for a business to reconsider how it uses its space; possibly remodeling its existing offices to better suit any changes that have occurred in the business since the office was new.

Keep in mind your landlord wants and needs to lease more space.  Your business is the key to making that happen.  The business owner and manager should capitalize on the landlord's needs by improving the office or distribution center lease terms.   When negotiating facility expansions on behalf of clients, I never fail to make it clear to the building landlords that only through its being creative and aggressive, will it realize benefits of increased occupancy and greater building operating income.

Think of it as a partnership between landlord and tenant.  The landlord creates expansion opportunity; the tenant uses this opportunity to expand its business.  The landlord's increased building occupancy and rental income increases the value of its real estate.