Leasing & Tenant Education
When Moving Isn’t the Best Business Decision
A renewal, expansion, or redesign can outperform an exciting new address.
Key takeaways
Relocation has an invisible invoice
Business leaders tend to compare the rent at their current building against the advertised rent at a prospective location.
Explore the alternative first
Before searching, evaluate what is not working.
Build a stay-versus-go model
Calculate the present value or at least total cash flows of each alternative over the same period.
Start long before expiration
A business that waits until the final months of its lease may face constrained options, rushed improvements, and a weak negotiation position.
Relocation has an invisible invoice
Business leaders tend to compare the rent at their current building against the advertised rent at a prospective location. That misses downtime, technology migration, signage, rebranding, inventory moves, construction, staff disruption, and customer confusion. Even a modestly cheaper lease can underperform after these costs are accounted for.
A business that waits until the final months of its lease may face constrained options, rushed improvements, and a weak negotiation position.
Explore the alternative first
Before searching, evaluate what is not working. Is the problem insufficient space, inefficient space, access, image, rent, or building condition? Some problems can be solved by renegotiating terms, reconfiguring rooms, securing adjacent space, extending parking rights, or obtaining an improvement allowance. Others, such as inadequate truck access or fundamental zoning limits, may truly require relocation.
Build a stay-versus-go model
Calculate the present value or at least total cash flows of each alternative over the same period. Include capital expenditure, disruption and downtime, deposits, free rent, annual increases, and a reasonable allowance for uncertainty. Seek professional financial advice for material commitments. Compare qualitative factors, such as talent retention and customer access, alongside the numbers.
Start long before expiration
A business that waits until the final months of its lease may face constrained options, rushed improvements, and a weak negotiation position. Review renewal windows and notice provisions well in advance. A broker can evaluate alternatives while preserving the opportunity to remain.
Practical points to consider
- Audit the actual reasons for moving before touring properties.
- Compare total occupancy and transition cost over matching periods.
- Review renewal notice deadlines early and seek proposals before options narrow.
Questions & answers
When should we begin planning a renewal?
Earlier for large or heavily improved spaces; the right timeline depends on search time, design, permits, and construction.
Does staying always save money?
No. Deferred maintenance, poor efficiency, or operational constraints can outweigh moving costs.
Can a broker help if we stay?
Yes. Market benchmarking and negotiation can be valuable in renewal discussions.
Helpful Resources
- SBA: Calculate Your Startup Costs: Plan for space, equipment, insurance, utilities, and expenses incurred before opening.
- BOMA International: Floor Measurement Standards: Review measurement standards for office, industrial, retail, and other properties. The overview is public; detailed standards may require purchase.
Important information
This article provides general information, not legal, engineering, tax, valuation, or investment advice. Numerical examples are illustrative unless otherwise stated. Consult qualified professionals about your specific property or transaction.
Make a Confident Real Estate Decision
Ask RJG for a stay-versus-relocate property strategy.
Schedule a consultation