Has the Pandemic Given Commercial Real Estate Tenants the Upper Hand?
October 6, 2022 by CRS Corporate Relocation SystemsBusiness
Before the COVID-19 pandemic, landlords typically had the upper hand in the commercial real estate market. But with the new circumstances and different factors that currently impact renting, tenants now have more control over their leases and the market in general. Now that companies allow their employees to work from home or operate on a hybrid schedule, commercial real estate has become more available, and the dynamic between landlord and tenant has shifted.
If you are looking for commercial space for your business, you may be able to take advantage of this new dynamic. When you find a space that works for you, you can look to us at CRS Moving & Storage to provide the complete package for all your moving needs. We work with you to develop a customized moving plan that fits your budget and ensures a seamless transition to your new office.
How Has the Pandemic Changed the Commercial Real Estate Market?
During the height of the pandemic, many companies transitioned to work-from-home schedules to keep their employees safe. But, when businesses could return to work, many of them decided to keep the work-from-home model, ending their leases and forgoing their office space. Other companies chose to only go into the office part-time, meaning they used their offices less often. All of this has left once-busy office buildings vacant.
With this increase in supply and decrease in demand, areas that used to have a heavy foot and vehicle traffic are much quieter. Tenants now have more options, and landlords are struggling to rent out these spaces, which puts the power in the hands of businesses.
What Do Tenants Look For in a Lease After the Pandemic?
This new dynamic between tenants and landlords has allowed businesses to be pickier about what they look for in a new space and a lease agreement. For example, companies may get increased discounts on retail and workspaces. Other requests tenants have made since the pandemic include some of the following:
- Flexibility clauses to protect from future disruptions
- Free or discounted rent for companies that have run into supply chain problems
- Office space in sustainable buildings
- Money to improve the space
- Perks, like a gym and restaurants, near the building or on the first floor
Due to the pandemic’s unpredictable nature, flexibility has grown in importance. With many of these clauses now included in writing, businesses may have more freedom to extend their leases or sublease their space, depending on performance.
Can Tenants Get Better Lease Discounts Because of the Pandemic?
When negotiating a lease, tenants typically attempt to lower the price as much as possible. Before COVID-19, tenants could expect to achieve a 10% discount at the most. But with the large availability of office space now available, businesses may be able to achieve 20-25% discounts, which all depends on the real estate market, the location of the space, and their credit.
Companies can now afford spaces they may not have been able to before the pandemic. Tenants used to have more power and control over these discounts, but tenants can now demand lower prices and have more leverage in this market.
Contact CRS Moving & Storage For All Your Commercial Moving Needs
If you have signed a lease for new office space, you may wonder about the next steps to set your business up for success during and after the move. You deserve movers that will alleviate your stress and handle every aspect of the process with ease. At CRS Moving & Storage, we can help you plan your move, pack your items, and install them in your new office. We provide everything you need for a smooth transition.
With over 25 years of experience in this industry, we have worked with companies of all sizes and moves all across the country. Our team can move your NYC business anywhere within the continental U.S. with our company-owned trucks. You can count on us to treat your items like our own and help you make the best decisions for your business. For a free consultation, call us at (718) 424-6000 or fill out our contact form.