Businesses are experiencing a period of critical change with permanent effects. Every business model, whether it’s B2B or B2C, will have to adapt to a new reality. Business owners will need to innovate, change models, and make strategic decisions, whether it’s finding a way back to profitability and generating the cash flow needed to meet financial obligations, or attracting the resources to handle a heavier volume of business. This will be more difficult for some entrepreneurs than for others.
In this two-part article series, we take a look at how organizations can operate more efficiently after the pandemic by rethinking their real estate footprint. Several potentially advantageous options can be implemented, whether you are a landlord or a tenant, and whether your premises are an office, industrial, or commercial space.
First, let’s consider the options for tenants.
Ask yourself these strategic questions:
- Is my real estate space still suited to my operations?
- How will my business or industry change over the next few years?
- What improvements can I make in my spaces to achieve better performance?
- How will my customers respond after the pandemic? What will their new consumption patterns be, and what new expectations will they have of my services?
- How will remote work and the use of technology affect my business and my business model?
- How can I protect employee and customer health and safety in my spaces?
- How do I attract and hire new talent?
What are some alternative options?
Consider the following:
- Reducing the space footprint or subletting part of it.
- Reducing base rent and deferring the difference to the end of the lease.
- A rent adjustment for a specified period, based on a percentage of sales (commercial premises).
- Terminating the lease for spaces located in different buildings (satellite offices).
- Extending the term, with equalization of the base rent.
- Extending hours of service in response to demands for flexibility.
- Adapting leasehold improvements to current needs.
- Obtaining certification that business operations comply with sanitary requirements.
- Access to specialized common spaces and/or janitorial services.
How BDO can help
BDO Canada and NAI Terramont Commercial can help you adapt a variety of real estate solutions based on your business needs, to ensure your leased space is an asset and not a financial burden. We can help you with:
- Developing and implementing plans for transformation and change
- Budgeting and business plan creation
- Financial recovery and fundraising
- Renegotiation and renewal of leases
- Company relocation
- Acquisition and disposition of assets, rentals and subletting, and sale-leasebacks
For more information, contact:
Chantal Cousineau, Partner, Assurance and Accounting, BDO Canada LLP
Alain Côté, Senior Vice President, NAI Terramont Commercial