Rental agreements for businesses here in Orange County and elsewhere usually last significantly longer than residential ones. When it comes time to renew these leases, tenants need to carefully consider whether it would be cost effective to move to a new location or to remain where they are. Before deciding not to renew a commercial lease, a tenant may want to consider some of the factors below.
The first factor is the existing lease. Does it include provisions for renewal? If so, an Orange County business owner will want to review those provisions to determine what kind of options and rent calculations were included. If the tenant finds them favorable, then it might be worth renewing.
However, money is not the only consideration. Does the space still make sense for the business? If the company has outgrown the space or does not use all of the space, it may be worth looking elsewhere. The problem is that rental space may be limited, and finding another suitable location for the price may not be worthwhile.
Another consideration is that changing locations means moving expenses. Setting up shop in a new location often includes more than just moving the contents of the current space into another one. Other expenses often come with it.
Addressing these types of issues when considering whether to renew a commercial lease often makes the decision easier. The next step would then be to make sure that the new lease provides the best deal possible. To that end, it may help to review the current and future leases with a commercial real estate attorney before negotiating the renewal.