3 Rules for Successful Commercial Lease Negotiations

commercial lease negotiationsWhether or not you like to negotiate you must learn to because you are going to go against the top commercial real estate negotiators when renting commercial property.  They will take you to the cleaners if you don’t recognize and know how to respond to what they do.  These top negotiators will sometimes include building owners, landlords, landlord representatives, listing agents, etc and they will use negotiating techniques to get the most favorable terms for them.

You have to think of negotiating as a game and not let your emotions dictate the outcome.  If you tell yourself that you will simply walk away if you have to it will be easier to treat this as a game.  Below are 3 rules to follow for successful commercial lease negotiations:

Avoid Over Negotiating

I agree that everything is negotiable however that does not mean you have to negotiate every point.  A common mistake is over negotiating & overkill on minor deal points that can cause the landlord or landlord agent to get angry, frustrated, & resentful.  It can also be perceived that you are not really serious, especially if you are making low ball offers in a hot market.

Proper Prior Planning Promotes Peak Performance

Successful negotiators diligently prepare before negotiating.  Structure the negotiations into 2 components: general business terms & lease contract review.  Ideally you want to develop and agenda of & reach agreement on the key deal points early on.  Start with the ones that are easier to agree on then work your way toward the more difficult ones.  Determine in advance how far you are willing to bend on certain business terms and stick to them.

Meet in Person with All Parties When Possible

You could rely on the attorney’s to negotiate the lease language however you risk losing control which can be very expensive.  If possible take the attorney’s lease comments to the negotiating table yourself.  Take some time to understand the attorney’s comments and narrow them down to only the most important ones.  We are not always able to negotiate in person however do so when you can.  It’s easier to say no on the phone and miscommunications are easier to occur.

If you must discuss via phone then email your position in advance to strengthen your position and place the call yourself.  After the call then email your opponent a summary of your understanding to avoid problems later.

These are just a few negotiation rules to follow.  You will run into highly skilled negotiators and you must be prepared.  If you would like to learn more about commercial lease negotiations feel free to give us a call at 512-861-0525

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