Negotiating commercial leases: Focus on important issues
Friday, October 26, 2018
For many commercial tenants, negotiating a good lease or lease renewal against an experienced agent or landlord can be a challenge. While an entrepreneur focuses on marketing and managing his own business, savvy real estate agents and brokers are specialized sales people. Their job is to sell tenants on leasing their location at the highest possible rental rate.
Tenants may go through the leasing process only two or three times in their entire lifetime — yet they have to negotiate against seasoned professionals who negotiate leases every day for a living. Negotiating appropriate leasing terms is vital for a commercial tenant as the amount of rent he or she pays will directly affect the entrepreneur’s financial bottom line.
Whether you are leasing a new for the first time or negotiating a lease renewal for your business, here are some tips:
Focus on important issues
We want to stress that certain issues such as the rental rate are dealmakers or breakers while other conditions like providing post-dated checks are not. Don’t ignore the details but don’t get bogged down over them.
Commercial tenants spend inappropriate amounts of time arguing or negotiating where it counts the least. Instead, focus on the important issues and revisit them as the leasing process advances.
Know your buzzwords
Every industry has its buzzwords and commercial real estate is no different. Our clients commonly ask us for the meaning of words following a meeting with their landlord. There is no shame in not knowing; however, you must ask for clarification.
The Lease Coach has prepared an excellent glossary (of approximately 200 words and/or phrases) used in the commercial leasing process. This glossary is included within our book, "Negotiating Commercial Leases & Renewals FOR DUMMIES" — both of which are very valuable to any commercial tenant or business owner.
For a copy of our free CD, "Leasing Do’s & Don’ts for Commercial Tenants," please e-mail request to JeffGrandfield@TheLeaseCoach.com.
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