Start up business taking an office lease.
This firm recently advised a small start up business, a tech company, located in cool tenant friendly incubator serviced offices. We were instructed following advice of their law firm who suggested we assist them as they were thinking about moving out of their serviced offices and taking a new lease of larger office premises. Terms were almost agreed but ultimately my client decided to stay where they are for another 12 months. So why did they not progress with the new lease? The final terms on the table did not match with my clients business plan so it would have been too big a risk for the fledgling business.
I think that there are 5 lessons for landlords here:
- Occupiers want Landlords to at least try to understand their business.
- Offering a low rent isn’t everything, especially to fast growing businesses.
- Businesses want transparency when it comes to occupancy costs so that they can budget properly.
- There is real value to both sides in trying to create a good Landlord & Tenant relationship during negotiations.
- Well advised occupiers can decide to “leave it” given the option.