Decisive Steps to Successfully Downsize

With the volatility of our economy during the past few years, many companies have resorted to a cost-cutting mode, often including downsizing their office space. There are assorted options to explore when looking for smaller space. Before moving forward in any direction, speak to your broker in advance of your lease expiration date: Depending on your size and situation this could be 9-36 months prior to your lease expiration. If you wait until the last minute, your negotiating leverage with your current landlord decreases (whether you want to stay and downsize or relocate). 

Why? Because your landlord knows you don’t have enough time to a) sign a lease in another building, b) have the new space built-out to your specs and c) physically relocate. One alternative acceptable to your landlord involves downsizing your space while extending your term. This way, you achieve savings on rent while your landlord gains more term, a critical lease factor for them. You may also wish to consider this strategy in another building if your landlord possesses a portfolio of properties. 

Also, you may choose to evaluate other prospective tenants. Has the landlord been negotiating with other companies needing more space?  If so, you may be able to terminate your lease early with little to no penalty. For example, a landlord with 2,000 square feet available adjacent to a 3,000 square-foot office may have been approached by a company looking to lease 5,000 square feet. You could help to deliver that space. Downsizing in-place is often an option but may encompass unintended consequences. Do you want to live through the inconvenience of construction? Is there another suite in your building that you can relocate to while construction takes place in your current space? Consider speaking with a broker who can then connect you with architects or contractors to determine any limitations.

What about the timing – can the transition be accomplished during off-hours and weekends?