A tenant's need to expand-- whether or not the lease includes expansion options creates the most difficult time to negotiate future lease terms.

Landlords reacting to a tenant's expansion requirement will use a common tactic of leveraging the "handcuffs" of that tenant's existing lease liability, which adds prohibitively high costs to the relocation.

This tactic strengthens the landlord's negotiating position and achieves more favorable terms and conditions than the landlord might otherwise obtain.

To counter this market dynamic, the tenant must evaluate certain factors before contacting the landlord when initially setting the strategy for expansion negotiations. These factors include rates, term, existing options, percent increase in size, and tenant improvements.

Tenants who need to expand should also evaluate their tolerance for the following options:

• Take no action until the lease expires.
• Lease nearby expansion space in a different building and use as a satellite facility.
• Relocate to larger quarters in a different building and market existing space for sublease.
• Lease additional space without extending the term.
• Lease additional space or relocate within the building under the landlord's terms (usually with a lease extension).

Premature discussions with the landlord imply that the only viable options being considered are taking no action or leasing additional space under the landlord's terms. Again, securing the services of Choyce Peterson signifies a serious intent of a tenant to investigate all options.

Choyce Peterson uses its negotiating experience and market knowledge to strategize and negotiate on a client's behalf, thereby ensuring that the client reaps the full benefits of their now greater value to the building owner. As tenant representative during expansion negotiations, Choyce Peterson can:

• Use increased tenant presence to maximum advantage when negotiating rate and lease flexibility.
• Provide cost benefit analysis of trade-offs between various expansion options.
• Create a comprehensive present value analysis of alternatives.

Better Information Leads to Better Real Estate Decisions