One of the first things we do in the early stages of a client engagement is prepare a timeline of key steps. The main reason we do this is to help our client understand the time required to complete all the work in order to facilitate intelligent decision making. In addition, it is really important to create and maintain negotiating leverage with landlords – especially when market dynamics favor landlords. Time is a huge component of this.
Most of our clients and prospective clients tend to think that the lease expiration date is the most significant date to work backwards from as they consider when to start a project. While this is an important date for planning purposes, we believe that the most critical date is the renewal option notice date. The reason for this is because once a tenant passes that date without having a transaction secured they have no legal rights to remain in their current premises.
Think about that for a minute. Under this scenario the leverage just shifted to the landlord and the risk for the tenant increased significantly. Most prospective clients we talk to seem to underestimate the time required to effectively deal with an office space project, which is further exacerbated when they realize that the “drop dead” date is really a year earlier than they thought.
In the next post I’ll cover more about the actual timeline.