Three Things Most Law Firms Forget When Renewing Their Lease
Dallas, TX, March 27, 2014 --(PR.com)-- Commercial real estate needs for law firms have significantly changed throughout the past decade. Offices are being compressed, meetings are held outside of the conference room, there is more focus on benefits for attorneys and an office’s appearance has become an integral part of the brand. A company must constantly reexamine their individual tenant needs and decide whether they are being met by a landlord.
Sanders Thompson; principal at Transwestern and manager of Law Space Advisors; has brokered over 1.9 million sf of leases for Dallas law firms for over 30 years. “Throughout my years of experience, I have seen the office space needs of law firms change considerably,” said Thompson. “Many firms recognize the benefits of having a capable real estate professional in their court, but there are those who do not. The truth is they may not fully understand the ins-and-outs of commercial real estate, or have the time to focus on the renewal terms. Without thoughtful advice, these firms could be left paying significantly more in rent and losing out on tenant improvements they need.”
“Our law firm, Gray Reed McGraw, has worked with Transwestern and Sanders Thompson for over 20 years,” says Tom Rhodus, managing partner of the Dallas office. “Sanders thinks like a lawyer and fully understands both the scope of our needs and our culture. Not only has he saved our company substantial money, but by managing the process, he has also saved us time and allowed us to focus on our own practice.”
Even the basic decision of whether to renew or relocate can benefit from the advice of an experienced tenant representative.
Thompson added, “When the time comes for a law firm to renew a leasing agreement, there are three important things to remember:
"Get the most out of your landlord. For almost all real estate deals, negotiation is expected to be part of the process. Oftentimes a landlord will make a better deal to get a new tenant than to keep a loyal one. It is vital to know the comparable leases in the building and be able to financially compare them. To help drive the best outcome for any lease agreement, we encourage our team to think outside-of-the-box for different opportunities to leverage a better deal. Second, is the building fairly empty? Did a steady renter just move out? And, lastly, especially in today’s investment, is the building showcasing for a sale? All of these situations can help negotiate in your favor.
"Term is a very important factor in a renewal. Especially if you are a small and growing firm, it may be in your best interest to only sign contracts less than three to five years in length. If a situation arises during your contract that would lead to your company moving out, you would still be responsible for the space until your lease term has expired. In a worst-case scenario, you would be responsible for subleasing your space or paying rent on the space until your landlord is able to find a new tenant to move in.
"Renewing may often be a better choice than relocating. Many factors could cause a firm to want to move locations: the firm has grown, better amenities for attorneys, or floor of the office, for example. Remember, your landlord does not want to lose you as a tenant, and you can use this to your advantage. If your problem can be fixed by moving offices in the building, expanding your current office, or including extra benefits, your landlord will be more inclined to agree to these terms for a more affordable rate."
Although these are three things for law firms to think over when renewing their lease, there are still more to keep in mind. In order for a firm to maximize their renewal lease, it is best to work with a professional real estate firm, like Transwestern’s Law Space Advisors.
Law Space Advisors is a new entity started by Sanders Thompson and Transwestern, a privately held real estate firm with over 33 offices in the U.S. Transwestern specializes in agency leasing, property and facilities management, tenant advisory, capital markets, development, research and sustainability. For more information, please visit www.lawspaceadvisors.com.
Sanders Thompson; principal at Transwestern and manager of Law Space Advisors; has brokered over 1.9 million sf of leases for Dallas law firms for over 30 years. “Throughout my years of experience, I have seen the office space needs of law firms change considerably,” said Thompson. “Many firms recognize the benefits of having a capable real estate professional in their court, but there are those who do not. The truth is they may not fully understand the ins-and-outs of commercial real estate, or have the time to focus on the renewal terms. Without thoughtful advice, these firms could be left paying significantly more in rent and losing out on tenant improvements they need.”
“Our law firm, Gray Reed McGraw, has worked with Transwestern and Sanders Thompson for over 20 years,” says Tom Rhodus, managing partner of the Dallas office. “Sanders thinks like a lawyer and fully understands both the scope of our needs and our culture. Not only has he saved our company substantial money, but by managing the process, he has also saved us time and allowed us to focus on our own practice.”
Even the basic decision of whether to renew or relocate can benefit from the advice of an experienced tenant representative.
Thompson added, “When the time comes for a law firm to renew a leasing agreement, there are three important things to remember:
"Get the most out of your landlord. For almost all real estate deals, negotiation is expected to be part of the process. Oftentimes a landlord will make a better deal to get a new tenant than to keep a loyal one. It is vital to know the comparable leases in the building and be able to financially compare them. To help drive the best outcome for any lease agreement, we encourage our team to think outside-of-the-box for different opportunities to leverage a better deal. Second, is the building fairly empty? Did a steady renter just move out? And, lastly, especially in today’s investment, is the building showcasing for a sale? All of these situations can help negotiate in your favor.
"Term is a very important factor in a renewal. Especially if you are a small and growing firm, it may be in your best interest to only sign contracts less than three to five years in length. If a situation arises during your contract that would lead to your company moving out, you would still be responsible for the space until your lease term has expired. In a worst-case scenario, you would be responsible for subleasing your space or paying rent on the space until your landlord is able to find a new tenant to move in.
"Renewing may often be a better choice than relocating. Many factors could cause a firm to want to move locations: the firm has grown, better amenities for attorneys, or floor of the office, for example. Remember, your landlord does not want to lose you as a tenant, and you can use this to your advantage. If your problem can be fixed by moving offices in the building, expanding your current office, or including extra benefits, your landlord will be more inclined to agree to these terms for a more affordable rate."
Although these are three things for law firms to think over when renewing their lease, there are still more to keep in mind. In order for a firm to maximize their renewal lease, it is best to work with a professional real estate firm, like Transwestern’s Law Space Advisors.
Law Space Advisors is a new entity started by Sanders Thompson and Transwestern, a privately held real estate firm with over 33 offices in the U.S. Transwestern specializes in agency leasing, property and facilities management, tenant advisory, capital markets, development, research and sustainability. For more information, please visit www.lawspaceadvisors.com.
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Law Space Advisors
Sanders Thompson
(214) 446-4560
lawspaceadvisors.com
Sanders Thompson
(214) 446-4560
lawspaceadvisors.com
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