Congratulations! You were successful in negotiating an option in your original lease form. Should you exercise it? Before you do there are questions you should ask yourself and these answers will determine which course you take. • Have you outgrown the space you currently lease or is it too big?
• Do you have options in your existing lease?
• When is your option notification date?
• How do your option rents compare to current nearby market asking rents?
• What is the condition of your current center?
• Is the landlord willing to renegotiate your option terms within your lease?
• What is your current sales trend? Going up or down?
• Does your current lease require you to report sales?
• Does your current lease require you to renovate if option exercised?
Some retailers do not take the time to consider the variables they should look at prior to exercising an option.
Always ask yourself, “If I was opening my business this year, would I pursue my current location or would I prefer a different location?" If the answer is “a different location” invest the time to contact other landlords and seriously consider relocating your business.
Once you have an alternate location in mind, consider contacting your existing landlord and share your intent. They may allow you to renegotiate your current options or offer you other concessions to keep you in the center.
