Negotiating commercial leases: What’s in a name?
Thursday, February 14, 2019
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:
What's in a name?
Occasionally, commercial tenants are tempted to name their business after the building they occupy. While this does create instant location recognition, it puts the commercial tenant at a disadvantage for commercial lease renewals.
Landlords and leasing agents will recognize that you are a more captive tenant as it can be difficult to move away from that location once you are so connected to it. So, if you were a restaurateur in Kingston Mall, for example, think twice about using the name Kingston Mall Restaurant. Instead, just call your business Kingston Restaurant.
For a similar reason, try to avoid street (or even neighborhood) names such as 2nd Avenue Bistro. Leasing agents often leverage these tenants into paying higher rent that necessary because of the decreased likelihood they will move away from their namesake location.
Try asking for a favor
If you are faced with an intolerable situation and all else fails, try asking for a favor. By doing so, you are basically saying, "I owe you one."
The Lease Coach has negotiated special conditions and favorable points of behalf of our client tenants by invoking favor asking. In some cases, we have helped commercial tenants get out of their leases and personal guarantees. Asking for a favor may not always work but it’s free for the trying!
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