When Should You Start Your Office Search Before Your Lease Expires?

The expiry date of an office lease may initially seem like a distant deadline. As a result, many companies only start considering whether to stay in their current office or relocate a few months before their existing agreement ends.

However, making the right decision in the office market takes time. Assessing requirements, exploring available options, viewing properties, comparing proposals, negotiating terms and preparing for a potential relocation can all make the process considerably longer than expected.

For this reason, it is worth starting the office search well before the current lease expires.

Why can starting too late become a problem?

The closer a company gets to the end of its existing lease, the less flexibility it has.

With limited time remaining, the decision may no longer be driven solely by office quality, location or commercial terms. Instead, availability and timing can become the determining factors.

This can be particularly challenging if the new office requires fit-out work or if the company has more complex relocation requirements.

Starting early, on the other hand, allows the business to choose from genuine alternatives.

The first step is not necessarily searching for offices

It is worth starting the process by assessing the company's current situation.

Relevant questions may include:

• Does the current office still provide the right amount of space?
• Is headcount expected to increase or decrease?
• Has the proportion of hybrid working changed?
• Are there enough meeting rooms and collaboration spaces?
• Does the current location still work well for employees?
• What monthly occupancy budget should the company target?
• Have technical or sustainability requirements changed?

Answering these questions makes it easier to focus the search on properties that genuinely match the company's needs.

Consider staying and relocating at the same time

The expiry of a lease does not automatically mean that a company should move.

The existing office may still meet the organisation's requirements, and extending the current lease under the right terms may prove to be the best solution.

However, making an informed decision requires an understanding of what alternatives are available on the market.

Knowing what comparable offices are available at a similar cost level allows the company to make a much more informed comparison between staying and relocating.

Market alternatives can also provide valuable context when renegotiating the terms of an existing lease.

How long does selecting a new office take?

There is no single timeframe that applies to every company.

For a smaller business looking for a move-in-ready office, the process may be relatively quick. For a larger organisation, defining requirements and selecting the right property alone may take considerably longer.

The process typically includes several stages:

1. defining the company's requirements,
2. identifying relevant market opportunities,
3. comparing proposals,
4. viewing shortlisted offices,
5. negotiating commercial and lease terms,
6. completing any required fit-out,
7. organising the relocation.

The larger the required space and the more specific the company's requirements, the more time should be allowed for the process.

Starting early may strengthen your negotiating position

Timing matters for more than just the number of properties available.

When a company is not under immediate pressure to relocate, it can evaluate proposals more carefully and negotiate commercial terms with greater flexibility.

An approaching lease expiry can significantly reduce that flexibility.

Allowing sufficient preparation time means the company does not have to accept the first suitable proposal and can instead compare several relevant alternatives.

Look beyond the headline rental rate

When evaluating a new office, it can be tempting to focus primarily on the rent per square metre.

However, actual occupancy costs are influenced by many additional factors, including:

• service charges,
• energy costs,
• parking,
• fit-out expenses,
• lease length,
• indexation,
• and potential landlord contributions.

Office proposals should therefore be compared on the basis of the overall cost and commercial structure rather than the headline rental rate alone.

When should a company begin its office search?

As a general rule, the more complex the requirement, the earlier the company should begin reviewing its options.

Starting early does not mean that an immediate decision or commitment is required. The purpose of an initial market review is to understand:

• which offices are available,
• what rental and occupancy cost levels to expect,
• which compromises may be necessary,
• and how competitive the current office is compared with alternative options.

Having this information early can make the final decision significantly easier.

Better timing means more options

Choosing an office is a long-term business decision and should not be left until the last minute.

Allowing sufficient preparation time can provide greater choice, clearer comparisons and a stronger negotiating position.

Tower Commercial Leasing provides an overview of the Budapest office market and helps companies identify opportunities that match their requirements in terms of location, size, layout and budget.

Is your current office lease approaching its expiry date?

It is worth reviewing your options in advance. We can help you compare relevant office opportunities across Budapest so that your next decision does not have to be made under time pressure.