When it comes to commercial real estate, landlords typically have the upper hand in negotiations with tenants. However, the COVID-19 pandemic has turned this dynamic around and given tenants more control of the commercial real estate market. With more businesses transitioning to fully remote or hybrid work schedules, more power lies in tenants’ hands.
After securing your new space, you can begin to look for a mover that best suits your needs. Our 100% woman-owned, commercial moving union company at American Moving & Installation Inc. is a one-stop-shop for all your moving needs. We provide all in-house services for a successful move in the Boston and Cambridge areas, from planning and packing to transporting and installing.
How COVID-19 Impacted Commercial Real Estate
When the pandemic struck, companies transitioned to a work-from-home structure, leaving their office buildings vacant. Even after businesses began returning to the office, many companies still operate on a remote model or only work in the office for a portion of the week. These new pandemic-induced operations have resulted in businesses releasing their leases on their real estate and giving up their offices.
This shift in work structure has increased the availability of commercial spaces and decreased the amount of traffic in busy areas. With a larger supply and lower demand for commercial real estate, leverage has shifted into the hands of the tenants. Companies can take advantage of this new power dynamic as they return to the office or get new office spaces.
Ways Businesses Capitalize on the New Commercial Real Estate Market
With more commercial real estate availability, companies can take advantage of the extreme discounts on retail and workspaces. Now that they have the upper hand, businesses have made requests for the following:
- Amenities like a gym and restaurants near the building or on the first floor of the building
- Flexibility clauses in their lease
- More free rent for those whose businesses are hung up on supply chain issues
- Space in sustainable buildings
- Funds for the tenant to improve the space
Flexibility has become a significant factor for businesses as they look for new office space because they want to protect themselves from events like the pandemic that caused their offices to shut down. With new COVID-19 variants constantly arising and construction moratoriums becoming more common, companies want to ensure their leases contain policies that allow them to extend their lease or sublease their space.
How Lease Discounts Have Changed Since the Pandemic
When negotiating a lease, tenants often try to lower the price as much as the landlord allows before they sign. Before the pandemic, businesses could expect up to a 10% discount on their lease. Thanks to the pandemic, tenants can achieve even larger discounts due to the large availability of office space.
Now, tenants can negotiate for 20% discounts on their leases and may even achieve 25% discounts depending on the following factors:
- The real estate market
- The location of the space
- The tenant’s credit
The pandemic has allowed tenants to have much more wiggle room in their leases as they are now potentially able to afford workspaces they wouldn’t have before. Where landlords used to have more control over the discounts tenants could receive, now the tenants have the upper hand in these negotiations.
Start Planning Your Company Move in Boston and Cambridge with American Moving & Installation Inc.
When looking for a new commercial space for your business and a moving company you can trust to handle the process, you deserve the best quality service and movers that work with you from start to finish. At American Moving & Installation Inc., we have over 60 years of collective experience, so we can meet all your moving needs for planning, packing, unpacking, and installing your company’s belongings.
As the only 100% woman-owned, commercial moving union company in Massachusetts, we are certified as a Women Business Enterprise with the Women’s Business Enterprise National Council (WBENC) and the Supplier Diversity Office through the Commonwealth of Massachusetts. We have also been awarded the Statewide Contract FAC 96. For a free consultation about your relocation, call us at (781) 878-8000 or fill out our contact form.