Lease Renegotiation Yields Concessions and Flexibility: Whitley Law Firm Case Study
One year prior to their lease expiration, Whitley Law Firm engaged Rich Commercial Realty to help them assess their pre-negotiated option to renew that was provided in their lease and compare it to current market transactions. Their ideal location offered dynamic monument sign on a major corridor that would be hard to match, but there seemed to be no way for them to grow contiguously.
The strategy was to determine if there was existing property they could purchase or locate a new lease opportunity that gave them more space, some signage on the building or monument sign and competitive terms given the current market. Several purchase options were presented, but were eliminated due to the extensive renovation needed for their use. We also explored several new lease options that enabled the firm to take advantage of the soft market and leverage those proposals to negotiate better terms with their landlord. Their decision needed to be made within six months prior to their lease expiration to notify their landlord if they wanted to exercise their option to renew.
The landlord agreed to engage an interior designer to determine if the current space could be redesigned to add more work areas and a second conference room. This exercise enabled the firm to divide one large office into two smaller offices, relocate an open work area to an under-utilized storage/hall space for a shared open work area and turn the former work area into a second small conference room off of the reception area. After pricing the revised plan, the landlord agreed to make the modifications at his expense with minimal disruption during business hours. He also agreed to lower the rent from the previously negotiated rates and provided market rent concessions as part of the negotiations. An option to cancel was also negotiated for the firm as a safety net in case the space no longer met its needs prior to the end of the new lease term.
The savings yielded the law firm over $16,000 in yearly rental rate reductions from its previous lease and flexibility for the future as the firm grows. The savings in productivity and relocation cost were added benefits to renegotiating the current lease.
“There was never any doubt that we had the best broker negotiating on our behalf. Rich Commercial Realty did an incredible job for us and enabled us to focus on our client matters.”
–Benjamin H. Whitley, Esquire, Partner, Whitley Law Firm