Lease Restructures Can Be a Win/Win

Based on recessionary trends and their impact on the office market, it’s clear that we have reached one of the lower, if not the lowest, points in the cycle. Accordingly, many corporate space users are recognizing this as an opportune time to extend and renew existing leases. Across the board, service providers are touting the benefits of early renewals and restructures. Even some building owners, eager to retain tenancy, are approaching existing tenants to initiate discussions.

If you are a corporate space user looking to cut costs, this is good news. But, before you take action, be sure you aren’t ill-advisedly jumping on the bandwagon. What if you need to maintain flexibility? Or maybe your current space is no longer functional? How well do you know your submarket? If rents are still trending down, restructuring an existing lease now for a longer term may not be your best option. Most important, do you truly know your business’ future—are you in a position to forecast long-term space needs? Ultimately, the feasibility of a restructure is determined case-by-case.