Deciding what to do when a lease is up is important for any corporate tenant. For small and medium-sized businesses, though, the stakes are even higher.
In general, these businesses operate with lower margins and have less financial cushioning. Without the benefit of in-house advisors, they often find themselves muddling through major real estate decisions on their own—and, as a result, missing valuable opportunities for cost savings, improved space utilization, growth potential, and better alignment with long-term goals.
With more than 800 million square feet of U.S. office space set to expire over the next five years, according to The Business Journals, businesses of all sizes are asking: Now what?
The answer depends on obvious factors like company growth projections, location, and financial constraints. But there are less evident considerations. How the work environment affects things like company culture, brand identity, and behaviors speak to the benefits of taking a more strategic approach—and asking deeper questions—to address challenges beyond the basic bottom line.
If the right office decision is a springboard to long-term success, the wrong decision can be a fast track to wasted resources and missed opportunities.
Now, with their leases coming to an end, many of those businesses are at an important inflection point.
Young cautions that it’s easy to be overwhelmed by the range of options that are available. “You could repurpose all or part of your current space to make it more efficient. You could negotiate for more flexible lease terms or consider subleasing or giving back part of your space. You could outright move and start anew. There are so many ways to go about it,” he says.
Asking the right kinds of questions is key to making informed, strategically aligned decisions.
“Granularity, drilling down on the little things, can lead to these lightbulb moments,” Young says. “For instance, what percentage of your time in the office is heads-down versus collaborative? How do you use the space that you have—what’s working well, what could be better? Are there underutilized spaces that could be reimagined for more productive uses?” Contact Jeff Young for more insights into these important considerations.
