General Counsel and the Headquarters Lease
Eric Allon, Bernkopf Goodman LLP
A general counsel is often asked to spearhead a company’s efforts in connection with a headquarters lease. There are numerous traps for the unwary in this endeavor. To avoid them, here are some issue to watch: Planning the timing for the move; forming a multi disciplinary team; creating criteria and locating the best space and landlord for the company; negotiating key terms in the letter of intent and the lease; and making sure the key construction benchmarks are met for landlord’s and tenant’s build out and occupancy of the new space, and departure from the existing space.
Any move to a new headquarters must dovetail with the expiration of the existing lease, thereby giving the company time to transition before the holdover provisions of the existing lease apply. It’s advisable to begin the process of choosing a new headquarters several years in advance.
At the earliest stage, the general counsel needs to select and meet with the team to set goals and priorities. The team should decide generally on the locations that work for the company and its employees.
Because tax and insurance issues arise during lease negotiations, it is important to alert the accountant and insurance agent as well as a tax attorney that a new lease is being considered.
A headquarters lease is a major undertaking. It’s a responsibility of the general counsel to oversee and coordinate the process, and to assure that the new headquarters will meet the company’s goals.
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