From a tenant representatives position the worst call is one from a tenant that has procrastinated to renew their lease. If their office lease expiration has occurred and they have been given a thirty day notice to vacate it is a nightmare. Sophisticated office tenant don’t put themselves into this position for many reasons.
It is helpful to take into account that in every lease transaction there are many potential professionals
Office Lease Required Personnel
- Potentially Landlord’s Lender
- Construction Contrator
- Landlord’s Attorny
- Tenant’s Attorny
- Landlord’s Broker
- Tenant’s Broker
- Furniture Coordinator
- Telecommunications Specialist
- City for Certificate of Occupancy or Inspections
- Utility Companies
- Telecommunications Company
As you see there are a lot of people that you will have involvement with when you are being forced out of your office and looking for a new home. The issue is that you will not be the only person calling on many of these people. However, you will be in a panic because thirty days goes by very quickly. The ideal time is about six months before your lease expires.
You need to avoid being in the position that you have been given notice to move out with a thirty day notice. Best case is that you could be forced to pay a month of holdover rent. Worst case is you could be on the street without an office.
So you can understand the urgency of the matter. I am gong to show estimates for the amount of time it could take to deal with each of the entities on the required personnel list for an office lease expiration.
Timing for an office lease expiration
- Tenant’s Broker – Space Search and Site Selection 5 days (Very Rushed)
- Tenant’s Broker – Request For Proposal 1 day
- Architect – 2 Days
- Construction Contractor 3 days
- Landlord’s Broker – Response to Request for Proposal 1 day
- Tenant’s Broker – Counter offer 1 day
- Landlord’s Broker – Counter Response 1 day
- Landlord’s Attorney – Draft lease 2 days
- Tenant’s Attorney – Reviews lease and makes changes 1 day
- Landlord’s Attorney – Reviews Changes and accepts (big assumption) 1 days
- Tenant – Signs Lease 1 day
- Landlord – Signs Lease 1 day
The entire estimated process to get to an executed lease took 19 days. This is very fast for a commercial or office lease. Many assumptions were made. None more important than every one of the people involved, architect, tenant’s attorney, landlord’s attorney, landlord’s broker and construction contractor (including subs) have time to act this quickly. Keep in mind they are working on multiple assignments and yours may not be top priority.
So assuming it took 19 days to get a lease. Once the lease is completed the timing for the remaining work looks like this:
- Architect – Generate construction drawings (2 days)
- Contractor – Files for permit with the city (1 day)
- Contractor – Construction begins 30 – 60 days depending on the scope of work
- Furniture Coordinator (30 days done during construction)
- Utility Companies (5 days done during construction)
- Telecommunication (14 days done during construction)
- City Certificate of Occupancy (2 days)
So with the above dates it would appear that the best possible date that the tenant could occupy the premises is within 54 days. An we made some assumptions that are very difficult to achieve. The lesson here is never let an office lease expiration occur unless you are in control. You need to have another space ready to move into approximately a week before your lease expires. Otherwise you could be facing a real nightmare.
I am amazed that I will warn tenants of this delima and they respond with all types of answers. The on e that gets me is it isn’t an issue we can work out of our houses. I guess they like to move twice. With a little bit of preplanning and thought every tenant can be in a great position for their next office lease expiration.