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The Lean Rent Playbook: How to Avoid Hidden Occupancy Costs
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4. Poor lease negotiation
Without data, it's hard to get the leverage you need to
negotiate lower rent costs. The problem is that assembling
the right pieces of data often takes time your lease
administration department doesn't have (especially if you
have to waste time on tasks like monitoring renewal dates
and managing subleases).
Even small, incremental rent reductions in your lease
portfolio can yield significant savings over time.
Suppose that between all your locations, you rent 1,000,000
square feet of space, and you pay an average of $25 per
square foot. Using data f rom your entire lease portfolio, you
demonstrate that you're overpaying for space in 10 percent
of these locations, and you renegotiate to reduce your rent
at those facilities, reducing your cost per square foot to
$24.50. That alone represents a yearly saving of hundreds of
thousands of dollars.
Estimated cost: $100,000+ in increased rent costs
The solution: Tango's Lease Administration suite
consolidates all your leases into a single, easy-to-
manage hub. You can analyze your portfolio to
see where you might be paying too much, then
leverage figures f rom comparable locations to
negotiate rate reductions.
