Flexible commercial property lease agreements
When lease flexibility meets opportunity...
“The stiffest tree is most easily cracked, while bamboo or willow survives by bending with the wind.” – Bruce Lee
Flexibility has become an extremely desirable modern day value. In fact, we don’t just desire it; we demand it. Technological advances have placed convenience at our fingertips and it’s now become our norm.
It’s about freedom of choice. So how does flexibility fit with commercial property and what the benefits?
Flexible leasesFor tenants: Commercial lease agreements are typically longer term arrangements, and while this can provide security, it can also become a noose around the neck of small businesses if their circumstances change. Locking in to a long term lease is all very well if the future is clear, but predicting longer term business cycles is challenging at best.
Therefore, the goal is to weave as much flexibility as possible into the lease agreement while maintaining an element of security. This could include the term of the lease; renewal, extension and expansion options and the right to sublease.
For landlords: The worst possible scenario for landlords is empty space. Therefore, attracting high quality tenants is the highest priority for any landlord serious about their commercial property portfolio. If flexibility is what the market wants, then flexibility it shall have. But that’s not to say the benefits aren’t mutual.
Allowing tenants more flexibility will help them respond and adapt to market changes; increasing the likelihood they will stay for the long term and therefore providing security for the asset. A flexible lease agreement also provides landlords with more options should the arrangement not work out.
Flexible propertiesFor tenants: Flexible work spaces are hot. Open plan, cellular, hot-desking, rent-a-desk, shared spaces, flexible spaces – there is no end to the options possible. And the more options possible, the more agile your business can be. Another hot word in business today is collaboration and flexible works spaces are breeding grounds for collaborative thinking. It’s not uncommon now for competitors to share spaces, which leads to sharing ideas.
Flexible work spaces also support flexible work arrangements. Frequent travel and flexible work hours can often mean empty desks or overflowing offices. Hot-desking or rent-a-desk schemes can provide workable to solutions to these types of problems.
For landlords: Innovative and flexible properties attract high quality tenants, who provide asset protection. Flexibility also adds value to a property and significantly widens the pool of prospective tenants.
Our advice: Be like Bruce – don’t let the wind put cracks in your business or investment, make sure they bend like a willow. For tenants, flexibility provides freedom; for landlords, opportunity.