Planning to Renew?

When your lease is about to expire, it may seem the easiest course to simply renew your lease on your own if you’re happy with where you are. But there are some compelling reasons why this action could cost you a great deal.

Leverage – Once you tell the landlord you want to renew, you are basically saying “I want to stay in your building and am not looking elsewhere.” This removes a good portion of your bargaining leverage.

Market – How can you be assured of the best deal if you don’t have anything to compare it to? When you don’t use a broker, you lose out on that valuable information.

Concessions – Most tenants think that it’s all about the price and do not realize that they are owed free rent and cash. They forget that if they leave, the landlord will have to come out of pocket for a new tenant, with potentially considerable downtime. The broker’s job is to determine the right kinds and amounts of concessions to ask for. Not doing this is the single biggest mistake tenants can make.

New Real Estate Laws – There might be a new law that could come up down the road that tenants do not know about. If they are not protected, it can cost them thousands or even ten of thousands of dollars. For example, starting in 2019, all NYC office space must be sprinklered. This should be negotiated so that the landlord will cover the costs.

Changes in the building – Over the course of the tenant’s occupancy, a new owner could come on board and change aspects of the building for better or worse. For Example, 60 East 42nd street used to run on a CPI escalation with no cap. It now runs on a Direct Operating escalation, which is much better for the tenant. The tenant most likely would not know to ask for this.

Niceness doesn’t matter – As nice as the landlord may be, and as good a relationship you may have, you are still a piece of income to him. Tenants often assume that they are getting special treatment because of their many years in a building. Often, nothing could be further from the truth.

Protection of your interests – Most landlords hire an agent to represent their interest. It helps to level the playing field if you have someone represent yours as well.