Q & A: Refinancing an Existing Lease

I am in the last 2 and a half years of my 5 year lease and I know I am paying more than the market rents. What can I do, are there any options for me?

Think of it in terms of refinancing your house. When the interest rates went down, you might have gone from a 6% or 7% interest rate to a 4% interest rate. You were charged a fee for the refinance, but the amount was most likely added to your current loan amount. It works in a similar way with a commercial lease. You can go through what is called an ‘early renewal process’ to renegotiate your current lease rates and get them to market, but there is a cost to you: Most likely, you will be “charged” an initial 3 or 5 years of term to the back end of your current lease term. It can be a very cost effective decision, but you want to be sure you are comfortable staying at your current location for an added time period. And, keep in mind that using a broker even in an early renewal can be a huge advantage.

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