Your broker has found you the perfect space to move your offices, and you’re excited to love. All that needs to be done is to negotiate the lease and sign on the dotted line, so you can pack up your office and move into your new home. But as anyone who has been involved in negotiating a commercial lease, it isn’t so easy. It can take a long time to negotiate the lease.
Unlike residential leases that are fairly static, there are a lot of moving parts in commercial leases. There are dozens or potentially hundreds of different deal points that are subject to negotiation on a commercial lease, with the parties and their lawyers on each side agreeing to each individual point.
Depending on how granularly you want to get into the details, an office lease can take anywhere from one day to a year or more to negotiate. Most commonly it will be in the three to nine month range. Below are some of the factors that can play a role in how long it takes to negotiate a lease.
The size of the space is one factor in terms of how long the lease negotiation will take. For leases on small spaces that are turn-key–especially for spaces in coworking buildings–there is often very little negotiation. You’ll likely have a contract signed and ready to go in a couple weeks. Large spaces are far more complex. There are a lot more details when you’re negotiating a lease for 100,000 square feet than when negotiating for 500 square feet.
How motivated are you to get a good deal? If you’re willing to sign the lease that the landlord hands you at the start with little negotiation, you can have your lease ready to go right away. But this is never the right approach. The aggressiveness with which you want to negotiate the lease will be critical to how long it takes to get done. How many points in the lease do you want to negotiate? How much do you want to push on each one?
The amount of back and forth between the tenant and the landlord will impact the length of the lease negotiation. Each time a counteroffer is made, the lease needs to be reviewed by the other party and their attorneys. Each of these rounds can take a week or more depending on the number of changes proposed.
Tenant experience and expertise also play a role. For example, national retail and restaurant chains have negotiated thousands of leases and have very standardized needs. A company like Starbucks, for example, will typically be able to negotiate a lease in a two to five months.
No matter what size of space you need or the type of business you are, it is important to leave ample time for the relocation process from finding a space to negotiating the lease to the buildout. Working with an experienced broker will be invaluable in this process.
To learn even more about the lease process, check out our office leasing guide.