If you don’t ask for it, you won’t get it. Negotiations can be tough, especially when you are trying to secure a great deal on a great space for lease, at the right price. It comes down to a few overbearing factors but the most important is the discovery into who holds the most negotiation power between parties, and the concessions you will have make. The end goal is seeing the deal inked with signatures with two smiling parties.
Understanding your position relative to the person or party you are negotiating with will give you the leverage you need to be at the right starting point. When making on offer on a space to lease you must keep in mind:
❖ Who is the landlord?
❖ Are they a large landlord like a REIT, or are they a small outfit with only a few buildings?
❖ Is there a cultural aspect to take into consideration?
❖ What type of building are you looking to tenant?
❖ Is it a hard to get into space, or is there a lot of vacancy?
❖ Are you a preferred tenant or industry?
❖ Do you need the landlord to participate in leasehold improvements?
❖ Do you have an existing relationship with the landlord? Good or bad?
From here you can formulate your strategy to achieve the deal you need to be successful. Of course, your starting position is often not the end result. There will have to be concessions and they can look like this:
❖ Paying more rent over the term of your lease for a leasehold allowance
❖ Paying less rent for no landlord involvement in leaseholds
❖ Securing a longer term to help finance your leaseholds, lowering rent for a long commitment
❖ Trading off things like options to renew, exclusivity, assignment provisions, terms, for more rent or leasehold improvements
❖ Free rental periods in lieu of leaseholds, rental rates
❖ Signage rights in relation to the location of your premises within the building
❖ Additional rent items to be added or deleted depending on the nature of your tenancy
This concession list is not meant to be exhaustive as the art of negotiation is just that, a delicate balance of the wants and needs of each party. There are so many areas to makes concessions on, that creativity becomes paramount to successful negotiations. It works best when each side of the deal is profitable,and this is called consideration to both parties. If your lease only benefits one party, then technically the lease not enforceable.
Negotiation tactic come with experience and translates to a style of sorts. When you practice the art of negotiation regularly you are better able to position yourself for your starting point and make according concessions that benefit your position in securing a great deal. Call us to inquire about how we can secure a great lease at an affordable price though our professional and extensive experience in the art of negotiation.