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If your organization has an existing lease with more than a year
or so remaining on the term, you may want to consider approaching
your landlord with an offer to restructure the lease. Nonprofit
organizations are looking to reduce costs in the current economic
environment, and restructuring an existing lease may be one way to
do that.
Organizations of all types should periodically review their
existing space to determine if it is time to expand, downsize or
use their space more efficiently. While most landlords do not want
to accept additional space in a down market, there may be some
financial benefit to doing so. If, for example, your creditworthy
organization has four years left on its lease of 100,000 square
feet but you really only need 75,000 square feet, you can approach
your landlord about restructuring the lease to reduce the space
while extending the term by another few years. Having a guaranteed
income stream for an additional five years might be enough
incentive for your landlord to accept a small portion of your
existing space in exchange. By committing to an extension of your
current lease term, your organization can avoid carrying unused or
underused space or investing the time and costs involved in
subletting the excess space.
Even if your existing square footage is adequate, you may want
to restructure the lease to obtain a tenant improvement allowance
(to refurbish existing space) in exchange for a lease extension or
other concessions your landlord may seek.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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