Early Lease renewals your goldmine for 2011

By: Greg Schenk, SIOR

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After 25 years of assisting tenants renegotiate leases to renew or relocate I believe this year will be your best opportunity to assist tenants in early lease renewals. Why with massive vacancies and even more sublease and shadow space you can create leverage for tenants who have no desire to move but want to improve their bottom line.

Historically 60% of our clients moved locations. The last three years the trend is up to 80% renewing their lease. Many times tenants do this on their own without a tenant representative which is a bad move as they have no idea of the incentives they can get. This is where you come in and the goldmine is at!

Renewing a tenant does take market expertise no doubt about it but you can get a lease renewal done in much less time than a relocation of a tenant. My average for renewals is four months vs 8-12 months for relocations.

Target firms with leases expiring 8-18 months out. I have even been successful doing an early lease renewal two and half years early.

Here are some examples:

An Architecture firm lost a major client and didn’t need half a floor it had leased for 2.5 more years.

We went to the landlord and got them to take that space back early and do a new ten year lease at almost 20% lower rental rate. That along with the less square footage improved the clients bottom line almost 25% per year for ten years! They were extremely happy and we made a very nice fee!

Second we recently assisted a bank to give back a large amount of unused space two years early.

This saved them almost 180k/year in rent. Again helping their bottom line and them being very grateful to us indeed.

How did we do this. First know your market in and out. Know you can leverage what is out there for your client to get the best terms and conditions on the early renewal.

Know your clients financials inside and out. If they are poor you wont’ get as good of terms.

Third get a space planner involved to make sure the client is getting exactly what they need going forward on any lease extension ( or relocation for that matter).

This strategy has helped me be one of the top brokers for 25 years now.

We are celebrating our 25th year giving a discount on our book, CD and one on one consulting

all can be ordered at

We are also again part of the NAR RCA Signature Series Speakers and available with grants to come to your association to speak.

All the best til next month

Gregory P Schenk SIOR


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