If your Manhattan office lease is expiring, involving a knowledgeable and experienced commercial real estate broker, known as a “Tenant Rep”, to represent you early in the process is an important first step that will likely save your firm time and money along the way, and, it’s all at no cost to you as Landlords in Manhattan typically pay the brokerage commissions as part of the transaction. How does a Tenant Rep help? In this post we’ll break down the process into a 4 Step Approach:
1. Establish Your Space Needs
As a first step in the process, together, you and your Tenant Rep would analyze and determine what your space needs are both now and in the future. This will include a discussion about whether or not to consider a renewal in your existing space, if possible. Through an in-depth conversation, you and your team will discuss and evaluate many different factors, including plans for headcount, budget and financial objectives, type of space required (open plan vs. office layout), location, building / area amenities, transportation needs, among many other components resulting in an overall strategy for your office space needs.
2. Learn About The Real Estate Market & Identify Alternatives
After completing the first step, it’s time to begin the search. Your Tenant Rep will then begin the time-consuming process of identifying different alternatives for you based on your search criteria and providing you with details on spaces that are available along with market information for the locations included in your search.
3. Space Tours, Compare Alternatives & Negotiate
After you have a list of alternatives, it’s time to determine which spaces to see and to then schedule a tour. It’s here that you will get out into the market and explore various alternatives. After conducting space tours and establishing a “short list” of potential options, you and your team will begin to analyze both the physical and economic aspects of each space to see how each option (including potential renewal in existing space if applicable) compares. After the analysis is complete, it will be time to submit proposals, begin negotiations. All of this will allow you to ultimately make an informed decision on how to proceed and which space to pursue.
4. Lease Negotiation
After negotiating proposals, you will make a business decision as to which space to pursue. At this point, the Landlord’s attorney will prepare a lease agreement for your review based on the agreed upon term sheet. At this stage, it’s very important to have a Tenant Rep on your side, someone that is experienced and knowledgeable, to work alongside your real estate attorney to review the lease, make comments and suggestions, and to help negotiate the lease. After the lease is completed, in final form and signed, then the space will be delivered to you and/or the construction phase will begin. Once complete, it’s time to move in!
Thanks for reading! If your office lease is expiring, we can help! Andrew S. Lazarus, Senior Vice President, at Tudor Realty has been advising tenants and landlords on commercial leasing matters in Manhattan as a commercial real estate broker for more than 19-years. Give us a call to discuss how we can help manage your search/renewal process with an organized and informed approach and hopefully save you time and money along the way and all at no cost to you!