When your business is leasing multiple spaces or buildings in a single geographic area or in multiple locations, it's easy to get bogged down on the details of each property; however, it's necessary to take a step back and assess your overall commercial real estate portfolio from time to time. Otherwise, you may be paying more than you should for your office space or be settling for solutions that are less than perfect for your needs. For a quick portfolio checkup, consider whether the following statements are true about your current commercial real estate portfolio:
1. Rolling Over Your Leases is a Smooth, Streamlined Process
If you're constantly scrambling when it comes time to renew your leases or search for a new space, it's time to rethink your portfolio. One of the biggest mistakes that companies make is not timing rollovers properly. Whenever possible, stagger lease terms to avoid having multiple leases expiring at the same time. This will give your team the time to focus their attention fully on one location at a time to ensure you're making the best decision and getting the most beneficial deal.
2. You'd Recommend Your Landlords in Glowing Terms
When your business is large enough to have a portfolio of commercial real estate leases, landlords should value your business. If you're anything less than delighted with your relationships, you should consider shifting your focus to work with companies or individuals who will provide the service you deserve and be willing to offer the right concessions, amenities and perks to keep your business.
3. You Are Consistently Choosing to Renew Your Leases
The needs of companies change over time, so it's expected that you may eventually outgrow a space or need to move to a new location. If you find that you are always choosing to relocate rather than renew, though, you may not be properly analyzing your business needs during the search process. Consider enlisting the help of a tenant rep broker who can provide you with advice and recommend the best spaces and locations for your company.
4. Your Occupancy Costs Are in Line with the Average
Large companies like yours should have an advantage at the negotiating table in any market. Take the time to calculate your total occupancy cost by adding your rents and CAMs, and compare them to the market average in the areas where you are located. You should be paying a rate at or below the average. If not, it may be time to renegotiate leases or look into relocating in the future.
5. You're Making Use of All of Your Rentable Square Footage
If you conducted an audit of used square footage versus total square footage, would you be pleased with the results? Every square foot of space that sits empty in a building or office is wasted money. Considering subleases and assignments or downsizing can save you big over time.
If you didn't agree with all five statements, it's time to do a more thorough analysis of your portfolio. Doing so will help you spot opportunities to make changes that will improve your portfolio and positively impact your bottom line.
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