Leasing commercial space involves more than just typical real estate negotiations. For a successful agreement on the right building, a business can try to handle commercial lease negotiations by themselves; however, greater success is more likely to be achieved by using brokers who specialize in commercial real estate as representatives. Leasing business property is a very involved process that requires knowing the steps it takes to obtain a lease that works in the best interest of a company.
Advanced Preparations
Commercial lease negotiations are time consuming, so the effort to search for and negotiate business property should start months before a company must either renew their lease or relocate to a different location. Time constraints increase the chance that negotiations will not go as desired, so a big window of time is essential.
This is when a business and brokers or tenant representatives must determine real estate needs, budget limits, and other requirements, then begin the process of searching for possible properties to consider. Communication between a company and its broker is essential to find suitable properties so that lease negotiations can begin.
Educated and Informed
Being educated and informed is important for both a leasing company and the agent handling the process. For the best commercial lease negotiation outcome, it is essential to understand two things: 1) the current commercial real estate market and 2) the landlord’s status regarding the property being considered.
The whole leasing process for commercial property requires that a broker know the cost of similar leased spaces and under what terms. It is also essential to know if the landlord has property that is hard to lease or is currently occupied and under a renegotiation process. The deal must be good for both the company wanting the space and the leasing landlord in order for both sides to be satisfied.
Negotiation Plan
Using all available information, brokers must develop a negotiation plan that considers both client and landlord needs. It is important to know ahead of time if there are ways to improve the outcome by learning how a certain landlord does business or even past experience with the same landlord.
It is important to know if the negotiations for a commercial lease are to renew a lease or for new property. Typically, landlords are willing to work with current tenants or offer certain accommodations to new leasing parties. Developing a plan for bidding and counter bidding ahead of time is important. Tenant representatives must know in advance from their clients what they can offer as negotiating points as well as have an idea what a landlord would consider as a favorable selling point.
It takes time time, good judgment, and an in-depth knowledge of the local commercial market to handle commercial lease negotiations. Success is achieved when a company and their tenant representatives are prepared ahead of time with their needs and wants as well as what specific items are negotiable. Good communication between agent, client, and landlord is the best way to negotiate for a perfect business space!
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