Reducing your office lease cost can create an immediate and dramatic increase in profitability and an increase in financial efficiency and flexibility
This is particularly relevant in today’s increasingly competitive business for three reasons:
Firstly, with the sharp increase in real estate values over the past few years, many businesses are now burdened with a high office lease cost, and are unaware of the options available for reducing it. Rents are declining so don’t waste the opportunity.
Secondly, exponential increases in technological innovation, workplace efficiency, and remote working continues to create opportunities for businesses to occupy less space versus unnecessarily occupying more space than they need, and paying the price. Plenty of downsizing opportunities are presenting themselves as vacancy rates increase.
Thirdly, even the smallest reduction in overhead could impact the success or survival of a business, by allocating capital to more worthwhile endeavors. Don’t overlook the small stuff!
Many businesses fail to proactively manage their corporate real estate because they underestimate the business risk involved in not doing so, or don’t have the time or expertise.
Outsourcing corporate real estate management to a professional real estate consultant can be very beneficial. Doing so will ensure that office lease costs are kept to a minimum and that the corporate real estate remains efficiently aligned with the business plan.
The process involves an understanding of the business’ real estate requirements and budget, investigating every option for reducing office lease costs, determining the net occupancy cost savings of every option, and professionally executing a process to achieve the required results.
There are five ways to reduce your occupancy costs and potentially control these expenses over the long term, including:
- Lease Audit and Service Charge Scrutiny.
- Disposition of surplus space by sublease.
- Early lease renewal to reduce rent/ operating costs to fair market value or below.
- Lease renegotiation to reduce total occupancy costs to an affordable amount.
- Lease termination/buy-out.
We’ve been able to reduce clients’ office lease costs by over 50% in some instances on service charge scrutiny, new leases, lease renegotiation and renewals, and up to 100% on subleases and assignments.