“Stay Vs Go” Cost Benefit Analysis

At Your Leasing Co. the “Stay vs Go” analysis Saves Time, Saves Money and Adds Value for the business owner by providing a logical, step by step process of collecting market information and presenting a commercial business case that incorporates the key elements of renewing a lease in comparison to relocating to a new site.

At some stage in the business lifecycle, every business, large or small, needs to evaluate whether they “STAY” and renegotiate a renewal or “GO” and negotiate a new lease in a new location. This process is not something most business owners look forward to doing.

So, where do you start? There are a number of moving parts to this decision that include, how the economy is performing and if it’s a Tenant or Landlord’s market, the capital cost of closing one site down and opening a new one and the potential growth in sales and profit. See the key considerations to be worked through below.

“Stay” & Renew

The stay and renew decision relies on:

  • The current rent vs market rent and the rent proposed by the Landlord.
  • Economic conditions. Is it a Tenants market or a Landlords market?
  • Vacancy rates, number of appropriate sites available.
  • Cost of make good on potential exit.
  • Does the current site fit future growth plans? Has the business outgrown the site?

“Go” & Relocate

Factors to be considered for a relocation:

  • The cost of fitting out the new site, the incentives package available and the cash investment required.
  • The new site better services clients, employees, access to transport networks, better parking etc.
  • Fit for future business growth strategy, potential for increased sales and profit.
  • Rent differential and how this will positively or negatively impact the cash flow.

Your Leasing Co. has undertaken more than 1,000 leasing transactions over a 25 year period and has a depth of knowledge and experience in assisting Tenants through this challenging decision. We utilise a decision framework that brings together the pros and cons of renewing or relocating in one place for our clients to consider all important aspects of the decision.

Our framework for assisting our clients through this challenging decision is set out below:

1. Review the Feasibility of the Renewal

Your Leasing Co. conducts an assessment of the renewal feasibility by reviewing:

i) Needs Assessment: Meeting with our client to understand their needs and assess the appropriateness of the renewal.

ii) Market Rent Appraisal: Understanding the asking and recently achieved rentals, as well as leasing incentives being achieved in the area.

iii) Analysis and Evaluation: Reviewing recent sales performance of the business, use this information to determine the optimal leasing outcome for calculating a proposed renewal rental.

iv) Lease Review and Make Good: Reviewing the lease with an emphasis on the make good requirements for a cost estimate to be prepared.

iv) Initial Recommendation: Providing a balanced overview of the stay and renew advantages and disadvantages.


2. Review the Opportunities for Relocating

This part of the assessment requires Your Leasing Co. to undertake a Site Search to identify appropriate options that fit the client brief developed in the needs assessment.

The Site Search: We distribute the brief to our network as well as conduct our own research for ideal sites that covers off market and advertised sites.


3. Negotiating the Renewal and Short Listed Relocation Potentials

We need to develop an understanding of the best outcome that can be expected at the existing site and at the same time, work up the best case of market rent and incentives packages at the short listed sites.

4. Present the Comparison and Analysis

Using our “Stay vs Go” Framework, we provide the analysis that reveals the option that best fits with the business owners defined needs and clearly outlines the optimal commercial outcome for the business owner to make the most informed decision.

Interested in finding out more?

Call our FREE phone hotline 1300 356 702.

Hear From Our Clients

I approached Mike for some advice on how to approach my landlord regarding my rental situation and the information he provided me was fantastic.

He looked at my turnover situation and gave me clear and concise advice as to how to approach the landlord and he also prepared a spreadsheet as to how much rent I needed to pay the landlord.

Mike also provide me information as to the process if the landlord was not willing to work with me.

In this difficult time for all small business when the last thing you want to worry about is the rent you need to pay you landlord. Mike’s understandings of the code of conduct and measured approach was second to none.

The time and work Mike saved me was amazing!

Anthony Cavallaro
Managing Director
Ray White City South

Your Leasing Co assisted me in March 2020 to renegotiate my lease. I’ve always gotten on ok with my landlord, however I felt quite intimidated and hesitant to ask for rent relief/reduction at the start of Covid.

Mike at your leasing co walked me through it step by step in a patient and simple manner. He even helped me draft the email.

I’m pleased to say that through Your Leasing Co’s coaching and structured process, I no longer have any hesitations to present a strong case to my landlord for relief/ reduction of commercial rent.

Victoria Butt
Managing Director
Parity Consulting

Kelly Cunningham originally helped us with a rent re-negotiation on our business premises some years ago. Then when the next review was due, she gave us advice that we could do substantially better by not renewing the lease. We took her advice and asked her to locate an alternative premise that would suit us in all respects.

The result of the search Kelly did for us and her negotiations with the new landlord on our behalf was that we were able to relocate the whole business to more appropriate premises with everything we needed including much better staff and client parking. Plus, the best thing of all - Kelly secured a much lower rental cost for us.

I would have no hesitation to engage Kelly’s services again for any help with our commercial premises leasing. I highly recommend her to anyone needing advice with lease terms, negotiations with landlords or location of alternative commercial premises.

Devon Barnes
Lindfield Speech Pathology & Learning Centre

Amanda and I would like to thank Kelly and Mike for the fantastic and professional job they did for us in extremely testing times. To run any business, we all face difficult situations, but to try to fund a Beauty Clinic in Melbourne during lockdown is something of another story. Kelly and Mike were always hard but fair to our Landlord and all parties were satisfied in the end.
Thanks again

Amanda and Peter
Peaches and Cream

Kelly from Your Leasing Co was an amazing help. Not only was she thorough with going through what I needed for my business in terms of leasing, she was so informative and knowledgeable. I was stuck with what I needed for my business and the options she was able to give me, helped me have more clarity in my leasing and where I stand with my Landlord. Thank you very much for the time you took to read go through my lease and take my calls and emails out of office hours. Will definitely recommend Kelly and Your Leasing Co and would use them in future where needed. Thanks Kelly.

Toni Katsaros
Elysian Hair Beauty Spa

Kelly and the Leasing Co Team were amazing to deal with. We were referred by an industry leader and the word of mouth certainly did not disappoint. Kelly worked tirelessly for us to find the perfect site. There was on going consultation to ensure that we were on the same page and navigating to find the ideal outcome. Kelly was the go between working her magic to produce the best possible outcome by negotiating and securing an incredible offer for us. We would highly recommend Kelly and Your Leasing Co. An absolute pleasure to deal with.

Esther Trapp
Urban Skin Spa

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