Knowledge about negotiating a lease can significantly increase the leverage of most business managers during the negotiation process. It is important to know that the terms are almost always more favorable for the owner; however, with a little effort on the part of the tenant, significant improvements can be negotiated onto a Dallas lease!
There are several factors that must be considered in order to gain more bargaining power during the negotiation process. For example, it should first be determined the current status of the local leasing market, as this could influence the contract terms. Following are some additional tips and tricks:
- Length – The length of a lease, also referred to as the “term,” is generally classified as short or long term. Most tenants prefer the benefits of a short term lease. This type of agreement offers more flexibility, especially for businesses that may be considering changes in the near future such as moving to another location or needing more space. The tenant usually pays higher rent for a shorter contract. On the other hand, long term leases offer tenants a more affordable rate during the contract period.
- Budget – It is essential that business owners first determine how much money can be afforded for a monthly lease payment; comparison shopping is a great way to check this out by getting rates from different office spaces. When the price for a unit seems high in comparison to others, negotiating with an owner for a reduction in the rent is always possible; however, it is very likely that this will not be considered unless vacancy rates for such offices are unusually high.
- Terms – It is also important to determine whether the terms of the Dallas lease include certain other expenses such as utilities, taxes, insurances or repair costs. A “gross lease” means that all expenses are included in the monthly rate, while a “net lease” means that all other expenses are separate which has the potential to increase expenses for the company. The best approach for most tenants to eliminate such extra expenses is to pay a larger monthly rent cost.
- Additional Space – The lack of space or the inability to add additional space is the most common reason that tenants move from a location. An astute tenant has included in a lease the right of first offer and first refusal. This means that the owner is obligated to offer any vacancies in the building first to current occupants before putting the space on the market. The right of refusal allows current tenants to be the first to view any new available space and be able to decide whether that space would benefit their business before it is advertised for occupancy.
- Improvements and Upgrades – When improvements to an office spare are needed, in a short term lease the tenant will most likely have to pay for such renovations. With a long term contract, most landlords are usually willing to pay for any needed improvements requested by new occupants as the monthly lease payment is frequently sufficient to cover such work.
Finally, it is important to give the factors discussed above a great deal of thought and consideration so that a business owner knows the tips and tricks to gain some leverage during the lease negotiation process. Of course, it is always advisable to seek the services of real estate professionals in order to get the most benefits and advantages in a Dallas lease!