Category: Insights

When is a Deal a Deal?

As the office market tightens and landlords’ bargaining leverage increases, tenants need to make sure they understand when they have a deal and when they don’t. When the market was weaker and competition for space was not as great, it was usually safe to assume that when the parties verbally agreed to terms, executed a…

Top 4 Reasons to Use a Tenant Advisor

You have been in a space for a number of years.  You and your employees are happy with the location and could probably make the drive with your eyes closed.  You know your lease expiration is quickly approaching and you plan on extending the lease.  Although resigning the lease may seem like an easy decision;…

Top 25 Economic Incentive Deals of 2015

Site Selection Group estimates that in 2015 more than $6 billion in economic incentives were offered to attract various projects in the United States ranging from office projects, such as headquarters and data centers, to industrial facilities, including manufacturing plants and distribution centers. While economic incentives continue to be scrutinized and heavily debated, they continued…

When Should You Start Thinking About Your Lease?

Most people only start to think about their real estate situation when they are coming up to the expiration of their lease term. Since many leases are seven years or more in length, people don’t think about their real estate very much. When they finally do, they are sometimes reacting to an emergency situation rather than executing on a well thought out strategy. Even if you are too early to enter the market or execute a new lease transaction, there are things you can be doing with your real estate to better support your business or plan for the future.

Potato Chips and Leasing

We’ve all done it. Opened up a bag of potato chips to find a lot of empty air where the afternoon snack should be. In the food industry there’s a name for all that air. It’s called “Slack Fill.” Food producers will tell you that there is a legitimate reason for Slack Fill. They say it is necessary because of today’s high-speed packaging machinery, or to prevent the product from breaking during shipment, or to keep the bag from breaking when trucked through high-altitude areas, or to discourage theft in the stores. Right. We all know why it’s there. It’s to give the illusion of more product.

Why Large Companies Don’t Maximize Negotiation Leverage

It’s startling to read a large tenant’s lease and discover how less favorable it is compared to what smaller tenants with less leverage achieved at the same time in the market. Sometimes, the rent and other cost exposures are higher; other times, the work letter was poorly negotiated or the company is overexposed to liability. Typically, the reason for this unexpected dynamic is the company’s internal real estate process, which is often fragmented and precise but not accurate.

How to Stay Within Your Tenant Improvement Budget

Building out new office space can be somewhat akin to buying a new car. We have all walked into a car dealership with a firm budget in mind but then we make the mistake of test driving the upgraded model with all the cool features. Individually, the cost of these upgrades seem fairly innocuous; however, when we sit down with the salesperson to see the final tally, we often end up in a completely different price range than we had intended.

Who Should Fit Out the Tenant’s Space?

Tenants spend a lot of time trying to find the right location for their business. They visit numerous buildings; test fit the spaces for efficiency and suitability and go back and forth on negotiations with the landlord over the economic terms. However, the tenant often fails to realize that after the lease is signed, a lot of financial risk still remains in the transaction. That’s because, in many cases, the tenant still has to build out its space, which can require significant capital and exposure to liability. Thus, if the tenant does not properly structure the construction arrangement for its improvements, its lease deal can end up costing a lot more than anyone expected.