An office lease expiry is one of those things that can easily get put on the backburner until suddenly it’s right in front of you. But without forethought and planning, it can end up being costly and very inconvenient!
Getting a start early is crucial whether you’re planning on staying in your current premises or relocating offices (if you are relocating, here is a helpful relocation checklist). Depending on the number of your employees, the size of your office space (current and into the future) and the complexity of your current commercial lease agreement, you should start planning at least 15-18 months before the lease expires.
Some things to remember:
- If you do not have a lease option in place, your landlord doesn’t have to renew your lease. This means whether you want to or not, you may have to relocate.
- If you are entering into a new lease, leave yourself plenty of time to establish the details. If you’re rushed, this gives the landlord more negotiating power.
- If you do have an option to renew, there is usually a notice period involved of 6-12 months.
- If your fixed-term lease expires, the landlord may allow you to remain in a ‘holdover’, on month-to-month terms. This is usually seen a risky proposition as you may need to be out within just one month if the landlord so decides.
So, what do you need to consider when deciding to stay and renew the current lease or move out and relocate to a new office? Let’s review the key factors:
Your current space
If you’re satisfied with your current office and location and have no intentions of outgrowing the space in the imminent future, it might be more beneficial to stay and renew your lease (if you have that option available to you).
Ask these questions:
- Is your current space fulfilling your needs?
- What about your needs in the near future?
Also, think about the costs of office relocation and factor this into your decision. Consider: planning, fit-out, ‘make good’ costs, moving expenses and any loss in productivity. Weigh these up against the benefits of moving to a new location eg. lower overheads or a better location.
If you do decide to stay put there is still a need to negotiate to ensure your company gets the best deal. Consider negotiating for things like base building improvements, new interiors, rights of first offer for adjacent space for growing into or contraction rights if you see downsizing in your future.
Company goals and objectives
An office lease expiry might just be the perfect time to consider how your workplace strategy fits in with your overall company goals and objectives and how your office space can support them.
Ask these questions:
- What are the growth forecasts for the business within 3, 5 and 10 years?
- What are the business goals over these same time periods?
- Do you need to cut costs or downsize?
- Is your objective to expand and attract new talent?
- Are there plans to change the way staff work (eg. more remote/teleworking)?
The type and amount of space you require post lease expiry depends heavily on the nature of the work being carried out so considering the company’s objectives is key.
Future plans
Examine your future business plans closely to help you decide whether to renew a lease or relocate your office. Think about how these plans might impact your current workplace and what they will mean for future space requirements. Reflect on whether staying put will allow your business to evolve in the right way, or if moving office will offer your business a better chance at future success.
If it looks like the future holds a dramatic change in the way your company works, or a large scale merger of departments from different offices into one, it’s best practice to engage with a change management consultant early on. Your consultant will help guide you through the process for a seamless transition with as little employee anxiety as possible.
Budget
As with most things, when it comes to an office lease expiry you need to consider the costs. Beyond thinking about lease or rent costs, it’s important to factor in all the many and varied relocation costs if you decide to move. Naturally, there are also costs associated with staying where you are, as your lease agreement may change for example.
How can a workplace design partner help?
If you’re feeling overwhelmed with all of these considerations, you’re not alone. This is where a workplace design partner can help. Companies like Axiom specialise in helping you design a workplace strategy, find your next property, manage the interior design, and transition your workforce.
Bringing in the experts ensures your business is taken care of, from start to finish. To learn more, download our free ebook How to choose a workplace design partner now.