Commercial leasing is a complex business. Understanding terms, finding the right properties, negotiating the best short or long term deal possible is all complicated by the detailed financial and legal processes that have to be secured along the way. Without the aid of a professional broker, tenants can find themselves locked in a long term deal that doesn’t work all because of some common leasing misconceptions.

#1: Trying to Lease in Retail is Futile

Unless speaking of online retail, the industry has taken its lumps over the last couple of years, leading many to believe that trying to lease retail space in this climate is futile. As of last year, nationwide rents climbed to nearly $17 psf – higher than at any time in the last decade. Even mall retailers saw close to 30% rent increases from 2016 to 2017.

#2: Your Leasing Options are Non-negotiable 

When the markets change – either decline or excel – renewal options become determinant to how you will proceed during negotiations. At the start of a lease, you negotiate extensions, renewal options, and rate increases. Your landlord will want to charge X, you have the right to negotiate Y.

Nothing is set in stone until all parties have signed on the dotted line. In a renewal, if you’ve been a good tenant, you can push for incentives and inducements to entice you to stay in your lease. Having a skilled broker that knows the market climate can help make the case for improvements, inducements, rent reductions, etc.

#3: A Landlord Can Charge Whatever They Want

Some tenants get into commercial leases thinking that the rates will stay about the same. Landlords go in expecting to increase rates according to inflation – but what inflation? Economic headwinds affecting one part of the country may not be affecting another. Instead of simply accepting a regular increase, factor your rent against your local inflation rate and not the national Consumer Price Index.

#4: Going with Green Leasing Will Cost You Money

Finally, today’s tenants are looking for greener commercial buildings. At the same time, the amount of work it takes to meet the many different standards has been cost-prohibitive. Leased commercial buildings make up a majority of leases and use up 36% of all of the electricity used in the U.S.

Green buildings are just the first step. There are companies out there aiming for Net-Zero Energy (NZE) use in commercial leasing. A big myth about NZE buildings is that you won’t get the same returns as you would in a non-NZE building.

Green builder RMI leased its first NZE building in Colorado a few years ago. It was the company’s chance to prove that NZE buildings work for all companies and not just eco-activists. The truth is, NZE buildings are yielding nearly 20% more ROI in the long term and 17% more in the short term.

Occupancy rates are at least a few percentage points higher compared to less efficient buildings. Building owners are able to charge more for NZE buildings than those backed by Energy Star and far more than traditional buildings, especially as millennials continue to take over the workforce.

WeWork started the concept but it has only grown and expanded from there. The co-working or flex space model which began in NYC is fast becoming the new Uber of commercial office space. With large corporations abandoning the traditional work model for more flex space, it is changing how landlords attract and retain tenants.

Recently, landlords are discovering that they can use their building’s flex space as an amenity to attract tenants. Flex space isn’t just a coworking hub: it is bookable meeting space, conference rooms, event space, and multimedia rooms. Tenants are also demanding more from flex space operators. Here are 5 reasons why landlords should view flexible space as an amenity for their tenants.

#1: Great Way to Increase Foot Traffic

WeWork bought the Lord & Taylor site on 5^th Avenue in NYC recently. The goal is to target retailers and combine the two in order to increase foot traffic to both. Other co-working firms are catching the wave and looking to broaden their tenant mix from simple office space to office plus. The ICSC (International Council of Shopping Centers) reports that co-working spaces will increase from 600 locations in 2010 to over 26K by 2020.

#2: Best Option for the Growing Independent Workforce

An NPR/Marist Poll reported at the beginning of this year that currently, 20% of the workforce is made up of contract workers. That number is expected to increase to 50% of the workforce over the next 10 years. Flexible space is the ideal solution for independent workers who may need workspace on a short term or temporary basis.

#3: Perfect Way to Use Up Unused Space

Most businesses aren’t looking to expand their office footprints, but flex space operators are, thereby keeping large office space in high demand. Flex space operators are targeting large shopping centers and corporate offices with a thousand or more employees to fill their empty office spaces with a diverse new mix of tenants. Large office parks and skyrises with plenty of vacant office space can mix in dozens of different businesses that can provide great amenities to the building’s tenants.

#4: Excellent Way to Provide Tenants More Flexibility

In the convenience economy, flexibility is the word. Office tenants have turned office spaces into a “pay-as-you-go” service. This flexibility allows entrepreneurs and startups to get their businesses off the ground without huge upfront investments and it allows landlords to keep the space occupied constantly

Companies with their own office spaces are starting a new trend turning flex space into off-site meeting space. Breather, a similar model to WeWork except they provide very short term office spaces that rent on average for a day or two, provide flex space to companies to hold off-site conferences, meetings, and brainstorming sessions.

#5: Brilliant Way to Foster and Increase Collaboration

 Along with the changes in workspace models is the change in work styles. Everything from office design to amenities is made to increase and foster collaboration among co-workers and among other tenants. According to one global study, over 60% of co-working tenants report an increase in focus and quality, while more than 90% reported that flexible workspace has aided business growth.