How should a company experiencing high growth position itself from the lease commencement?

Here are a few suggestions:

Lease space from a landlord that owns many buildings.

These landlords often will be able to relocate a tenant to another one of their properties without requiring a penalty.

Negotiate various rights up front such as:

Assignment and subletting. Companies should negotiate enough flexibility in the assignment and subletting clause to allow for mergers, reorganizations, and share ownership changes.

Right of first offer or first refusal for additional space.  A right of first offer obligates your landlord to present any space that becomes available in the building to you first before marketing it to third parties. A right of first refusal on space obligates the landlord to bring you any deals he is willing to sign with third parties for space in the building and allow you to match the deal and preempt the third party.

Option to Expand.  For office leases, the tenant's right to expand into additional or adjoining space in a building can be very valuable.  You can have a fixed expansion option, where the tenant has a defined period of time in which to exercise the option on a defined space.

Early Termination.  This allows a tenant to terminate the lease prior to the lease expiration.  There is usually a penalty attached to this right amounting to reimbursement of unamortized tenant improvements, rent abatement and leasing commissions.

Option to Renew.This can provide control of a space without being committed to it.

Minimize the lease term either on a direct basis or through a sublease.

The key to this is being adaptable.  Find something that requires little to no work in order to keep the initial investment low.  You may want to target buildings that are in less demand.

Choose an area with adequate data, power transmission and parking.

If the location of the office was selected because it was a hot redevelopment district that is great, but what if due to its old age there is a lack of updated infrastructure and available parking?  That is not always the case but if it was, a company with increasing technology and parking needs might be sorry not being in a more updated environment.

In addition, remember, a good decision made opportunistically can be better than the best decision made in an untimely manner.

Again these are just some thoughts.  Hire a seasoned Tenant Representative to help your company effectively come up with a leasing strategy to establish maximum flexibility throughout your lease term.

Nothing contained herein is to be considered legal advice. Always seek legal advice when evaluating any legal document.