How a Madison Landlord Retained Two Tenants and Avoided Potential Vacancy
One industrial tenant in Madison wanted less space. Another, across the parking lot, needed more.
The first occupied 8,800 square feet, the second 3,600. Both leased space in adjacent flex buildings owned by the same landlord, and neither knew what the other was planning.
Both tenants had reasons to consider leaving, and their leases expired at different times. From the landlord’s perspective, these looked like two unrelated leasing situations.
Two Tenants, Two Different Deadlines
Bryant Meyer and I had placed both companies in these buildings years earlier. We stayed in touch after the leases were signed, checking in periodically to see how their operations were doing and whether their space requirements were changing.
One conversation revealed that the 8,800 SF tenant wanted to downsize. It had less than eight months remaining on its lease. A separate conversation a few months earlier had revealed that the 3,600 SF tenant needed additional room, although its lease had more than a year to run.
Each tenant had a reason to consider moving. For the owner, that created two potential leasing problems on different timelines. If both eventually relocated, the landlord would have 12,400 SF to backfill across the two buildings.
Neither tenant had committed to leaving, but waiting until their leases were about to expire would have reduced our options.
An Idea From Two Unrelated Conversations
After the second conversation, I started thinking about the tenant across the parking lot. One needed less space, the other needed more, and both buildings had the same owner.
What if they simply switched?
In more than 26 years of commercial real estate brokerage, I’d never encountered quite that situation.
Bryant and I approached both tenants about the possibility, and both were receptive. The layouts also had to work for both companies. Fortunately, each could get space better suited to its needs without having to search a very tight Madison industrial market.
Keeping Both Tenants Without the Usual Turnover Costs
Bryant and I negotiated new leases with commitments of three to five years and coordinated the moves and minor suite improvements with the owner. Both tenants moved across the parking lot, and the landlord experienced no rental downtime.
Both tenants stayed, the new leases provided higher rents and longer-term commitments, and construction costs were minimal. Leasing commissions were lower, and the legal expenses were substantially less than would typically be incurred negotiating with new tenants.
Had either tenant left, the owner could have faced an extended marketing period, uncertain downtime and another round of negotiations and tenant improvements.
Madison’s industrial vacancy was 3.2% at the time, so the market was certainly favorable to landlords. Our Q2 2026 Madison industrial market update describes how limited the practical choices have been for local industrial users. Even in a market that tight, finding replacement tenants for these particular spaces could have taken time.
What the Check-Ins Accomplished
A rent roll tells an owner when leases expire. It doesn’t tell them that one tenant is outgrowing its space while another wants to downsize.
Most routine check-ins don’t lead to a new lease. This time, the two conversations were months apart and about different problems. It took knowing both to see a solution across the parking lot.
FAQ
Can industrial tenants change spaces before their leases expire?
Yes, if the landlord and tenants agree to new lease arrangements. Moving an existing tenant into another available suite can accommodate changing space requirements without requiring the tenant to relocate to another property. Lease terms, improvement costs and move timing all need to be addressed.
What costs can industrial landlords avoid by retaining existing tenants?
Depending on the transaction, retaining tenants can reduce lost rent, vacancy-related operating expenses, leasing commissions, tenant improvements and legal fees. Maintaining occupancy also reduces the uncertainty associated with finding and negotiating with replacement tenants.
Chris Caulum, SIOR
Vice President of Commercial Brokerage
Chris specializes in industrial and office real estate throughout Madison and South-Central Wisconsin, helping owners, investors, and businesses make informed commercial real estate decisions.
608-443-1040
ccaulum@oakbrookcorp.com
Meet Chris Caulum