This article was published in 2020 as part of our COVID-19 Resource Center series. This article will not be updated but please contact us if you have specific questions regarding the information in this article.
Over the past few weeks, our AQUILA tenant representation team has begun working with a number of tenants to understand what rent relief options are available to them in order to save on overall operating costs during the pandemic.
Read More: 3 Potential Rent Relief Structures to Talk to Your Broker About Amidst COVID-19
With social distancing requiring non-essential offices to close and employees to work from home, there may be a few cost-cutting measures that you can employ in addition to rent relief strategies in order to save on your overhead costs.
In this article, we’ll outline five areas where you may be able to secure additional savings for your operating expenses.
Areas of Potential Cost Savings
1. Parking Costs
With employees not coming into the office, you may consider negotiating for reduced or abated parking expenses. If your landlord requires you to pay for a certain amount of spaces, consider asking them to waive these requirements while you aren’t in the office using them.
Your landlord may or may not be receptive to this, but it may be a way for them to provide you some relief while still covering their debt and operating expenses.
Landlords have uniformly told us that each tenant will be handled on a case-by-case basis and that an understanding of their past, present, and anticipated future financial position is going to be paramount [to the rent relief they will be prepared to offer them].”
– Jay Lamy, What You Need Prepared Before You Approach Your Landlord for Rent Relief Negotiations
If you pay for parking through another vendor, consider speaking with them about reducing or removing your spaces temporarily. If you pay monthly, it may be a good idea to let your spaces go for a few months until social distancing is over. But, make sure your spaces will still be available for you to lease in the future.
Alternatively, if you provide your employees with a transportation stipend to encourage them to take alternative means of transportation, this may be an easy expense to temporarily cut while they are working from home.
Finally, if you provide a shuttle system from a satellite parking location, contact your shuttle service to make sure you’re not paying for unused days.
2. Printer/Copier Leases
Copier and printer leases can be a substantial expense – sometimes costing thousands of dollars per month. If you’re not in the office using these machines, we recommend looking at your contract and contacting your provider to see what options you may have available to you.
While it’s unlikely that you’ll be able to simply cancel your contract in the middle of the term, at least without incurring fees, you may be able to negotiate a solution that works for both you and your service provider.
Ideally, a good service provider will be willing to work with you to ensure your happiness and long-term loyalty. They may be able to reduce costs for these unused months (you’re unlikely to have any service calls with the office closed), or they may offer to give you these months free in return for an extended contract or slightly increased rate upon resuming services.
3. Recurring Office Supply Orders
If you have recurring orders set up for your office, be sure to put these on hold if they aren’t already. These could include:
- Paper supplies
- Mailing supplies
- General office supplies
- Anything else you regularly stock
Canceling these orders can help you save money and not waste supplies. Check with your operations, administration and IT teams to ensure no supply order gets missed. There may be smaller items that management isn’t thinking of that need to be canceled or put on hold.
Even once back in the office, this may be an area to reevaluate while business readjusts.
4. Services and Subscriptions
If your office has any recurring services or subscriptions such as cable, internet, or telephone services you may want to cancel them until social distancing is over. This could also include music subscription services for retail or other types of businesses.
Talk to your vendors and be sure you can secure your current subscription rate so that you don’t end up spending more money by canceling.
All in-person events have been canceled during this time. While we don’t know how long this shelter-in-place will last, it’s good to look ahead and be sure you understand what your refund options are for any events you have planned in the next few months.
Be sure to look at the contracts you signed with venues, caterers, and any vendors you booked for events to see what their refund policies are. Even if your contract says they will not refund your payments, it’s still a good idea to reach out to them and see if you can work something out. At AQUILA, we’ve had luck by asking to apply these nonrefundable deposits to a future event once the shelter-in-place is over.
If you were planning on sending employees on business trips during this time, to conferences, or had any other travel plans or event tickets, be sure that you also cancel these plans in time to get a refund or credit for a future trip.
Read Next: How Can A Blend-and-Extend Lease Agreement Help Lower Your Company’s Costs During COVID-19?
To learn more about office real estate trends in Austin in the face of the current global pandemic, visit our COVID-19 Austin Real Estate Resource Center.
During this uncertain time, AQUILA is here as a resource for you, and we are ready to help with any questions you may have.
To get more information on your unique situation, schedule a consultation with our tenant representation experts.