The “office of the future” looks very different today than it did a few years ago. Many of the previous expectations for tech-enabled flexibility have born out, but at a rate and speed no one could have anticipated. Now, many businesses are scrambling to make decisions based on how employee trends and tastes may evolve even further.
The biggest factor driving this change is work from home. At many companies, workflows were altered ad hoc to accommodate a pandemic-dispersed workforce in a virtual office — and a lot of employees and businesses found that the new status quo worked better for them than the old one. As a result, a significant number of companies have transitioned from working in the office full time to having a hybrid work model or working remotely full time.
While some companies are abandoning in-person workspaces altogether, others find value in face-to-face meetups or flexible in-office workspace. Adopting a model that is flexible enough for this new dynamic requires a wholly new understanding of maintaining a real estate footprint.
So, you’ve been weighing these factors for a few months, and your lease is about to expire. Now what?
Before you rush into one decision or another, it’s important to weigh the benefits of finding a new office for rent or staying put where you are.
Start by reflecting on what aspects of your current office have worked for you (and what could use improvement). This may be difficult if you haven’t been back in the office in more than a year.
Some important questions to ask yourself include:
Don’t wait until the last minute to make this decision! Many commercial lease agreements have language requiring you to provide written notice of intent to renew 6 to 12 months before your existing lease expires. Wait too long, and you could find yourself unable to renew on the same or similar terms as you once had.
If your existing space offers you much of what you want and need, you can save a lot of hassle by simply renewing your lease. When you decide to renew, you have the option to simply sign on to the original lease office terms again, or renegotiate your lease to accommodate any new circumstances at your company.
Near the end of your term, you’ll be presented with a renewal offer, and you can decide to take it or not. No matter which approach you choose, you must give advanced notice or the landlord is legally allowed to lease your office space to another tenant without your consent.
If you choose to renegotiate your lease, there are a number of important steps you should keep in mind. Before you start, gather info like lease contracts, annexures, rent statements, and a property condition report to guide your negotiations. Also, be sure to look into market rates in your area — if they’ve dropped, you can ask for a reduction in rent.
Finally, read through the contract for language about subleasing office space. In the event that you wind up with more office than you need, it helps to know whether or not you can rent out space to cover costs.
What if business is slow?
An office lease isn’t a short-term business decision. If you want to stay in your current space, but business is slow, you can propose a rent abatement.
Rent abatement acts like a loan. You won’t pay a large sum up front, but you agree to pay the balance later on (sometimes with interest). Partial rent abatement is also available for companies that don’t want to take on a substantial debt burden. If business is currently underperforming but you expect things to pick up, this is a very attractive option.
If your operations have shifted during the pandemic (e.g. you no longer have a full team working every day, or you’re hiring more people outside of your HQ location), looking into flexible office spaces like The Square could be a great way to offer workspace without paying for a lot of space you’re not using.
Tips for success when leasing a new office space:
If you plan on moving out, don’t wait until your lease is almost up to figure out what you want to do! Let your landlord know well ahead of time and start preparing for your transition early.
The rapidly evolving nature of work has pushed many companies to reevaluate their current office space. Hybrid work models are on the rise, and employees want to enjoy working from the office just as much as (or more than) they enjoy working from home.
Your workspace can have significant impacts on your business, so choosing to renew, renegotiate, or find a new space is a big decision. Be sure to take your time, do your research, and reach out to a commercial real estate broker if you need some guidance.
Explore flexible and scalable workspaces. Get in touch with The Square.