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How to Renegotiate Your Commercial Lease

    1.  Get an early start in negotiating your lease.

  • It’s important to start negotiations early to avoid losing leverage and flexibility in your lease renewal negotiations. The closer your lease gets is to expiration the less believable a threat to relocate is. Starting early allows you to evaluate the market and look for better rates in other areas. It also allows you to turn down your landlord’s first proposal.

  • 2.  Do not accept the first proposal.

  • By holding off on furthering negotiations and looking other places you communicate to your landlord that you’re considering alternatives. Never accept the first offer. With enough time and leverage, you can always negotiate more than the landlord will initially propose.

  • 3.  Push for more, even if you’re happy.

  • When it’s finally time to respond to your landlord’s proposal, it’s important to be aggressive. Always ask for more than you’re actually looking to get. It is in your landlord’s best interest to keep your business and they will continue to negotiate even if your counter is low or unreasonable. An aggressive approach will also set the stage for what the landlord needs to do to please you.

  • 4.  Negotiate more than just rate.

  • When negotiating your lease, rate isn’t the only thing on the table. Lease renewal time is your chance to fix any problems or complications that may have come up during your lease term. Office improvements like carpet and paint are a few common subjects but you can also ask for renovations, upgrades, parking spaces and more. It’s important to ask for perks and improvements while your landlord is competing to keep your business.

  • 5.  Consider other spaces to introduce competition and increase leverage.

  • Whether or not you’re interested in relocation or not, it’s important to consider other spaces. This gives added leverage to your negotiations with your landlord. You must convince your landlord to compete for your business and the added leverage of relocating is important.

  • 6.  Get a tenant representative to do the talking.

  • Being that it’s in the best interest of the landlord, they will try to negotiate directly with you and get you to agree to terms and sign a lease. Before agreeing to any terms, it’s important to develop your approach with your tenant representative beforehand. Speaking directly to a leasing agent or landlord can undermine your negotiations thus far.

  • 7.  Good tenancy is worth less than you think.

  • In terms of leverage, being a good tenant and always paying on time aren’t worth much. These things are expected as a part of your lease agreement and may actually decrease the amount of leverage you have. As a renewal it’s likely that you will get a less competitive rate than a newcomer. Landlords will often give better terms to newcomers to remain competitive while only offering relatively good deals to renewals.

  • 8.  Work with your rep to control information regarding the negotiations.

  • To avoid losing important leverage in your negotiations, be sure to control information within your company. It’s not uncommon for landlords to know people within your company and some will work to uncover your motivations. This can lead to a loss of leverage and ultimately gettings a worse deal on your lease renewal.

  • 9.  Get yourself a tenant broker at no cost.

  • While landlords negotiate with leaseholders daily, tenants are only in the market every once in a while. This puts the landlord at a great advantage when it comes to negotiating a lease for a commercial space. It’s important to find a commercial real estate broker that specializes in tenant representation. A real estate representative can negotiate deals based on the current market climate as well as compare your current lease terms to those of competitors. The presence of a broker adds credibility to your negotiations and provides some leverage. This can cause a landlord to offer more competitive terms to avoid the loss of your business.

Let a professional tenant representative negotiate your lease or lease renewal and save you money.
Contact us today to schedule your free consultation 1-800-986-9201