by JAMES COOGAN
SENIOR DIRECTOR
PLYMOUTH PARTNERS, LTD.

The best advice any company with office leasing decisions coming up could get is to analyze their current lease first. The object is to structure the new lease to be the most cost-effective, learning from the particular clauses or concessions that either helped or hurt the company in the past.

With current market conditions bringing rents and concession packages lower than they have been for some time, squeezing out value remains all-important. The companies that will come out ahead are those that reduce their leasehold expense by instituting a thorough lease -audit strategy.
Ask yourself these questions: Is your firm fully realizing what it deserves in concessions, whether in the form of tenant improvement dollars, free rent or a reduction in base rent? Has your company negotiated the most favorable escalation formula?

If your company is going to have to invest in remodeling to maximize space efficiency, have you built in stipulations for obligations to the landlord in the form of allowances or contributions?

Experience has shown that a good number of tenants don't concentrate enough on how their leases are structured. Many brokers tend to overlook this kind of detail work. The tendency is to get the deal done, to only focus on the basic business points and move on to the next.

Lease auditing is a specialized field that has become a valuable tool to allow savvy tenants to manage their liability. This service is best provided by specialists familiar with the nuances and components that make up the lease document, such as operating clauses, tax clauses, as well as each component from phased-in rent increases to utility costs. These details are invaluable in providing insights into how the next lease you sign should be structured. For best results, it makes sense to seek and profit from the counsel of a professional who provides this value-adding service for a living.

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