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HOW DO YOU NEGOTIATE A COMMERCIAL LEASE FROM A POSITION OF POWER?

On behalf of Michael Brooks of Law Offices of Michael A. Brooks posted in commercial real estate on Tuesday, May 29, 2018.

If you’re about to enter your first commercial lease as a renter, you have every reason to be nervous. The law automatically presumes that you’re savvier than the average residential renter — so you’re on your own when it comes to negotiating a fair deal from the landlord.

How do you find a strong, powerful position from which to negotiate?

1. Know your options.

If you don’t look around and consider all your options, you may jump at a bad deal simply because you think that you have to have it.

Worse, the landlord may sense that you’re anxious and offer you a deal that definitely isn’t a bargain.

It’s okay to really want a particular building for your business. But temper your enthusiasm with the sure knowledge that you have other options if this deal falls through — and be willing to use them. That’s the only way to negotiate from a position of strength, not weakness.

Spend some time with your broker looking at all the available options, including building (if necessary), so that you don’t go into any negotiations giving out unconscious signals that you just have to have a particular piece of property.

2. Talk to other tenants.

Are you looking at an office building with multiple tenants? If not, does your landlord have other properties that he or she rents to other companies?

You need to visit some of those tenants and ask questions. How is the landlord about keeping up the property? What about when it comes time to renew the terms of a lease? What other information can they offer you?

The odds are good that you’ll get some honest reviews about what the landlord is like on a day-to-day basis. That sort of information can help you decide if it is really a wise decision to get into a contract with a particular landlord or not. Someone that has a troubled relationship with several other tenants is likely to have the same relationship with you.

Obviously, it’s always important to look carefully at everything in any lease you’re offered — but these two steps can help you exude more confidence when you’re at the negotiation table.

Source: LeaseRef, “6 Tips to Negotiating a Killer Commercial Lease,” accessed May 29, 2018

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