The Do's and Don'ts of Office Leasing

• Publication year: 1995
• Pages: 2355

24 Colo.Law. 2355 Colorado Lawyer 1995.

1995, October, Pg. 2355. The Do's and Don'ts of Office Leasing

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Vol. 24, No. 10, Pg. 2355

The Do's and Don'ts of Office Leasing

by Donald M. Oberndorf

© 1995 Donald M. Oberndorf

As a result of the dramatic turnaround in the Denver office market, vacancy rates have steadily declined while, reciprocally, rental rates have consistently risen. The extent of this trend should not be underestimated It appears that there will be continued reduction in vacancy rates and complementary increases in rental rates accelerating throughout 1995 and 1996. Many law firms have been and will be especially affected because they previously leased in "Class A" buildings that were inexpensive by historical standards. Bargain spaces of five years ago are now fetching relatively high rental rates. Firms with leases coming due may be in for a real awakening. Furthermore previously cheap and available parking locations may now be at rents so substantial that parking for employees and clients is costly or unavailable

With the rental market changing dramatically, tenants would be wise to become better informed about the process of renewing leases at their existing buildings and about locating new office space opportunities. In this author's experience, many office tenants approach the renewal process with the expectation that their landlords (with whom they have a good relationship) will be anxious to retain them as longstanding tenants of the building. However, landlords who have accepted mediocre returns for the last eight years are now in a position to achieve attractive rates, and are poised and ready to do so. Given that rent is generally the second largest overhead expense for most law firms, principals would be wise to learn more about the process and seek the assistance of those knowledgeable in the field.

The following sections contain lists of do's and don'ts that tenants should consider when contemplating leasing or renewal of office space.

What Tenants Should Do

1. Begin the process of evaluating space needs early. Allow sufficient time to explore adequately both renewal and relocation options. Even if the firm's first inclination may be to remain in its present space, become acquainted beforehand with other options that may exist. Allow a year or more, depending on the size of the firm. A timeline should be established that includes...