Leasing Do’s & Don’ts for Commercial, Retail & Office Tenants
FranchisingAuthor :
Dale Willerton 
Dale Willerton is The Lease Coach - a Lease Consultant who works exclusively for tenants. Dale is a professional speaker and author of Negotiate Your Commercial, Retail & Office Lease or Renewal.
Need help with your new lease or renewal?
Call Dale at 1-800-738-9202,
e-mail DaleWillerton@TheLeaseCoach.com
or visit www.TheLeaseCoach.com and/or www.HelpULeaseCommercial.com.
For many business owners, negotiating a good lease or lease renewal against an experienced landlord or his/her agent can be a challenge. While entrepreneurs think of marketing and managing, they are not real estate focused; savvy real estate agents and brokers are specialized sales people. Their job is to sell commercial tenants on leasing their location at the highest possible rental rate.
Commercial tenants may go through the leasing process once or twice in their entire lifetime – yet they have to negotiate against seasoned professionals who negotiate leases every day for a living.
Whether you are negotiating a lease renewal or leasing a new location for the first time for your business, these are just a few of my recommended “Leasing Do’s and Don’ts” for tenants:
Do Negotiate to Win: All too frequently, commercial tenants enter into lease negotiations unprepared and don`t even try winning the negotiations. Often, commercial tenants mistakenly set their sights on just striking a fair deal. This usually plays right into the hands of the leasing agent who is most certainly negotiating to win the best deal for his/her boss … the landlord. If you are not negotiating to win, you won`t. With big commissions at stake, you can be sure the landlord`s agent, on the other hand, is negotiating fiercely to win. Commercial tenants should remember that it is okay to negotiate aggressively.
Do Allow Enough Time: For a new lease agreement, get started between six and nine months in advance to avoid unexpected situations. You may have difficulty scheduling a meeting with an absentee landlord or encounter delays in receiving the necessary paperwork. For lease renewals, negotiations should begin between nine and 12 months before your term expires. With doing this, you will have sufficient time and do your homework. If you cannot get a decent renewal rate, would you rather find out you need to move with six weeks or six months left on your lease term? With both new leases and lease renewals, time will be your ally or your enemy, depending on how you use it.
Do Create Competition for Your Tenancy: When conducting site selection, shop yourself around to more than one landlord. Collect written Offers to Lease from landlords to use as negotiating leverage.
Don’t Let The Landlord’s Realtor Represent You: Real estate agents and brokers typically work for the landlord who is paying their commission. It is not normally the agent`s role to get the tenant the best deal – it is their job to get the landlord the highest rent, the biggest deposit, etc. The higher the rent you pay, the more space you agree to lease and the longer lease term you sign for, the more commission the agent typically earns. If you are researching multiple properties, try to deal directly with the listing agent for each property, rather than letting one agent show you around or show you another agent`s listing. Your tenancy is more desirable to the listing agent if he can avoid commission-splitting with other agents.
Don’t Forget to Do Your Homework: What I mean by this is to talk to other tenants in the property. Some of the best information available is from this source. Introduce yourself as a prospective tenant and ask for their honest opinion of the landlord. Inquire about the level of property maintenance, the rental rates and the tenant’s future intentions to stay another term and so on. Most tenants are open to discussing such matters. What you learn may surprise you; use this information wisely in your own negotiations. Do you really want to locate your business in this property?
Don’t Forget to Have Your Lease Documents Professionally Reviewed: The smartest business owners I know use professional counsel. When you are about to spend hundreds of thousands of dollars over a multi-year lease, can you really afford not to have your lease reviewed by an expert? Utilizing a professional Lease Consultant to review pertinent documents and negotiate may save you tens of thousands of dollars while also avoiding the stress related to nasty lease clauses. The Lease Coach specializes in negotiating new leases and renewals, site selection, document reviews and one-on-one consulting. Think of it as an investment in your company’s future success.
As I explained earlier, these are just a handful of my “must-know” leasing do’s and don’ts for prospective and/or current tenants. Interested in learning more? Please request my free leasing CD entitled Leasing Do’s & Don’ts for Commercial, Retail & Office Tenants by e-mailing to DaleWillerton@TheLeaseCoach.com.
Commercial tenants may go through the leasing process once or twice in their entire lifetime – yet they have to negotiate against seasoned professionals who negotiate leases every day for a living.
Whether you are negotiating a lease renewal or leasing a new location for the first time for your business, these are just a few of my recommended “Leasing Do’s and Don’ts” for tenants:
Do Negotiate to Win: All too frequently, commercial tenants enter into lease negotiations unprepared and don`t even try winning the negotiations. Often, commercial tenants mistakenly set their sights on just striking a fair deal. This usually plays right into the hands of the leasing agent who is most certainly negotiating to win the best deal for his/her boss … the landlord. If you are not negotiating to win, you won`t. With big commissions at stake, you can be sure the landlord`s agent, on the other hand, is negotiating fiercely to win. Commercial tenants should remember that it is okay to negotiate aggressively.
Do Allow Enough Time: For a new lease agreement, get started between six and nine months in advance to avoid unexpected situations. You may have difficulty scheduling a meeting with an absentee landlord or encounter delays in receiving the necessary paperwork. For lease renewals, negotiations should begin between nine and 12 months before your term expires. With doing this, you will have sufficient time and do your homework. If you cannot get a decent renewal rate, would you rather find out you need to move with six weeks or six months left on your lease term? With both new leases and lease renewals, time will be your ally or your enemy, depending on how you use it.
Do Create Competition for Your Tenancy: When conducting site selection, shop yourself around to more than one landlord. Collect written Offers to Lease from landlords to use as negotiating leverage.
Don’t Let The Landlord’s Realtor Represent You: Real estate agents and brokers typically work for the landlord who is paying their commission. It is not normally the agent`s role to get the tenant the best deal – it is their job to get the landlord the highest rent, the biggest deposit, etc. The higher the rent you pay, the more space you agree to lease and the longer lease term you sign for, the more commission the agent typically earns. If you are researching multiple properties, try to deal directly with the listing agent for each property, rather than letting one agent show you around or show you another agent`s listing. Your tenancy is more desirable to the listing agent if he can avoid commission-splitting with other agents.
Don’t Forget to Do Your Homework: What I mean by this is to talk to other tenants in the property. Some of the best information available is from this source. Introduce yourself as a prospective tenant and ask for their honest opinion of the landlord. Inquire about the level of property maintenance, the rental rates and the tenant’s future intentions to stay another term and so on. Most tenants are open to discussing such matters. What you learn may surprise you; use this information wisely in your own negotiations. Do you really want to locate your business in this property?
Don’t Forget to Have Your Lease Documents Professionally Reviewed: The smartest business owners I know use professional counsel. When you are about to spend hundreds of thousands of dollars over a multi-year lease, can you really afford not to have your lease reviewed by an expert? Utilizing a professional Lease Consultant to review pertinent documents and negotiate may save you tens of thousands of dollars while also avoiding the stress related to nasty lease clauses. The Lease Coach specializes in negotiating new leases and renewals, site selection, document reviews and one-on-one consulting. Think of it as an investment in your company’s future success.
As I explained earlier, these are just a handful of my “must-know” leasing do’s and don’ts for prospective and/or current tenants. Interested in learning more? Please request my free leasing CD entitled Leasing Do’s & Don’ts for Commercial, Retail & Office Tenants by e-mailing to DaleWillerton@TheLeaseCoach.com.