5 Ways to Evaluate Commercial Lease Renewals Better with CoStar
by Andy Thomas on August 5, 2021
Corporate and retail tenants evaluate commercial real estate lease renewals better with CoStar Market Data + Analytics applications at their fingertips.
Renewals represent a significant revenue opportunity for landlords that want to increase rent rates without incurring more costs or losing tenants. Tenant real estate managers make more confident in lease renewal recommendations and are better prepared to negotiate terms with the most complete and up-to-date information from CoStar.
CoStar empowers tenant real estate managers with on-demand, unlimited, unfiltered access to market data and analytics on more than 6 million commercial properties. CoStar streamlines access to critical lease renewal information and notifies key stakeholders to take action with industry-leading management applications recommended by more service providers than any other.
Here are five ways tenant real estate managers evaluate commercial lease renewals better with CoStar:
1. Gain broader awareness of markets, submarkets, and space alternatives.
Due to the dynamic nature of the real estate, the key to successful lease renewal evaluations is to use CoStar to continually monitor market and submarket conditions – including lease comps, space availability, demographics, and more – and to prompt team members to make decisions well ahead of critical deadlines. A thorough list of space alternatives is also essential for evaluating current leases and comparing good options.
2. Secure stronger negotiating positions for renewals.
Market knowledge is critical to favorable negotiations, as is understanding the financial implications to landlords for lease renewals. Knowing how much landlords stand to gain by renewing leases relative to other building tenants – versus loose without renewals – puts tenants and real estate managers in the driver’s seat during negotiations and helps win back portions of landlord renewal profits.
3. Provide more explicit guidance to brokers.
Well-informed tenant real estate managers work more effectively with brokers when evaluating lease renewal proposals, reviewing alternative space options, and securing the best deal outcomes.
4. Offer more value and cost savings to the business.
Tenant real estate managers provide more value to the business during lease renewal evaluations by leveraging CoStar to review and recommend employee amenities, space configurations, infrastructure, parking or transportation issues, and more. Landlords may be willing to incur associated costs to update spaces and retain tenants. Most importantly, lease renewal evaluations are made more confidently, knowing that the most comprehensive and reliable market data and analysis are used in decision-making.
5. Maintain better confidentiality for strategic planning.
Often companies want to keep real estate plans private and not signal to the marketplace or competitors their interest in moving locations or acquiring additional space. Having direct access to CoStar market information and applications ensures confidential strategic planning and better alignment with real estate initiatives and overall corporate goals.
CoStar Market Information
Properties provide the complete inventory of spaces available and fully leased. View photos, aerials, maps, floor plans, stacking plans, and more. You can access valid owner, broker, and property manager information. Lease Comps offer up-to-date rent rates and concessions like escalations or free rent to negotiate confidently. Plus, see the most active brokers and make connections with local professionals. Lease Analysis calculates vital metrics and cash flows to create lease proposal comparisons. Market Analytics enables an understanding historical property performance, rent growth forecasts, vacancy, and demand.
CoStar Management Applications
Lease Administration streamlines lease portfolio details to manage critical dates effectively and automatically notify key stakeholders of pending renewal activities. Plus, integrated CoStar market information lets users see lease details for other tenants within specific buildings associated with tenant lease portfolios. It also can automatically trigger Transaction Management with pre-configured renewal team projects that include workflows, tasks, milestones, and document tracking. Portfolio Planning provides a strategic view of lease portfolios, enabling data-driven decisions and guiding actions to create cost savings.
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