How do you renew a lease in this hybrid era?

Your commercial lease is ending. Now what?

Photography by Magda Biernat

What’s the Point?

The shift towards remote work has caused a rethinking of office spaces with companies adopting hybrid or fully remote models. Some companies still value in-person workspaces, but the need for flexibility requires a new understanding of your workspace. As a lease is about to expire, companies must weigh the factors to decide the future of their office space.

The “office of the future” looks very different today than it did a few years ago. Many of the previous expectations for tech-enabled flexibility have born out, but at a rate and speed no one could have anticipated. Now, many businesses are scrambling to make decisions based on how employee trends and tastes may evolve even further.

The biggest factor driving this change is work from home. At many companies, workflows were altered ad hoc to accommodate a pandemic-dispersed workforce in a virtual office — and a lot of employees and businesses found that the new status quo worked better for them than the old one. As a result, a significant number of companies have transitioned from working in the office full time to having a hybrid work model or working remotely full time.

While some companies are abandoning in-person workspaces altogether, others find value in face-to-face meetups or flexible in-office workspace. Adopting a model that is flexible enough for this new dynamic requires a wholly new understanding of maintaining a real estate footprint.

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So, you’ve been weighing these factors for a few months, and your lease is about to expire. Now what?

Decide if you want to renew or lease an office in a new space

Before you rush into one decision or another, it’s important to weigh the benefits of finding a new office for rent or staying put where you are.

Start by reflecting on what aspects of your current office have worked for you (and what could use improvement). This may be difficult if you haven’t been back in the office in more than a year. Some important questions to ask:

  • Are there challenges you regularly face that would be resolved by moving?
  • Is the risk or cost of moving worth it?
  • Can your current office scale up (or scale down) to accommodate new strategies?
  • Are there amenities that you wish you had access to?
  • Do you feel good when you’re in the office?
  • Do your employees?

Don’t wait until the last minute to make this decision. Many commercial lease agreements have language requiring you to provide written notice of intent to renew 6 to 12 months before your existing lease expires. Wait too long, and you could find yourself unable to renew on the same or similar terms as you once had.

Your workspace can have significant impacts on your business, so choosing to renew, renegotiate, or find a new space is a big decision. Be sure to take your time, do your research, and reach out to a commercial real estate broker if you need some guidance.

Read the full article from The Square