Looking for commercial space? To set yourself up for success at the negotiating table, follow these tips:
It’s unlikely that you’ll get everything that you want from a negotiation, so it’s important to know what’s most important going in. Determine which demands are deal-breakers, highly desired and would-be-nice-to-have in order to help you stay focused.
2. Knowledge is Key
Having in-depth knowledge of current market conditions is essential to a successful negotiation. When you can back up your requests with data to show that what you’re asking for is “market”, you’re more likely to win the landlord over.
3. Start as Early as you Can
Don’t underestimate the amount of time that a negotiation can take. Starting early will keep you from racing against the clock and being pressured into settling for a less-than-fair deal.
4. The Longer the Term, the Better…
One of the best ways to get a landlord to make concessions and agree to lower costs is offering a longer term on your lease. Finding new tenants to fill vacant spaces means expenses for landlords. You’ll usually find that they’re willing to negotiate when they’re guaranteed that you’ll be in a space for several years.
5. …but Don’t Overextend
At the same time, it’s important that you’re realistic about how long you can commit to remaining in a space. If your business is growing rapidly or you believe you may relocate in the near future, locking yourself into a long-term lease as a negotiating tool isn’t a smart strategy.
6. Put it in Writing
Long before you start negotiating the lease document, the basic business terms should be agreed to and reduced to writing in the form of a Letter of Intent.
7. Know the Lease Backwards and Forwards
You can’t effectively negotiate if you haven’t fully read the lease. For the best outcomes, you’ll need to understand every clause. Seek clarification for points that are confusing before you head to the table.
8. Have a Plan B
Even if you believe a particular space is ideal and that you will ultimately be able to negotiate a fair deal, make sure you have a backup plan. You don’t want to find yourself out of time and options if things don’t go the way you planned.
9. Stay Professional
Your emotions shouldn’t have a seat at the negotiating table. Stay respectful even if the landlord seems unreasonable, and don’t let your desire to win prevent you from compromising to get your deal-breakers.
10. Call in a Pro
There is so much work to be done long before you get to the negotiating table with your preferred building: defining your needs, identifying all potential space options, touring properties, issuing proposals and developing test-fit space plans, to name a few, that you should discard tips 1-9 and instead engage an experienced commercial tenant representative to assist you from the beginning. Having a commercial tenant representative on your side will not only improve outcomes during negotiations but ensure you’re at the right table. Because they know the market, a fiduciary that is representing your best interests will give you an edge. Best of all, the Tenant Rep’s fees are paid by the landlord, so you won’t incur additional costs to reap the benefits of their knowledge and experience. It’s a no brainer.
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