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Archive for January, 2012

4 LEASE RENEWAL STRATEGIES MADE SIMPLE

by JeffMinea, 7:06 PM on January 18th, 2012, No Comments

We all want to feel empowered in our decision making process no matter what the subject is, and when it comes to your property lease, here are 4 simple things to consider before you begin the process:

1.  ALLOW 12-18 MONTHS TO BEGIN THE PROCESS

This time allows you to maintain leverage in discussions with your Landlord. Staying tight lipped could backfire if a neighboring Tenant needs more space, or the Landlord is allowed time to talk to a new Tenant. Result: your space could be leased out from underneath you- not good! Negotiating late usually sends a message that you are a “captive prospect” and you will get less and pay more.

2. KNOW THE MARKET FOR YOUR BUILDING

Go to the listing agent’s website or www.mncar.org, or www.loopnet.com, to find out what the asking rents are currently for your building. In a soft market as we have had, the
asking rent may be less than what you are currently paying. This is a valuable piece of information as you frame your strategy for a lease negotiation.

3. KNOW THY NEIGHBOR

There’s a good chance you are in a multi-tenant building, so getting to know another business owner/executive, who ideally moved in recently (or renewed), and getting their observations about likely concessions and rental rates will help you gain additional valuable knowledge.

4. UNDERSTAND YOUR WORTH AS A TENANT

Landlords want to know how your business is doing and without sharing financial statements (yet), you should be prepared to tell your story of longevity as a business, good payment history, industry competitive rank, and growth and other outlook items of interest. The more confidence they have in you, the better the concession package will be in the end. The other item of value is whether or not you are able to sign a 5 year lease or longer. This sets up the value proposition more than any of the others in a negotiation as it gives the Landlord the most value with their lender to name one example.

SUMMARY:

The above points will provide the litmus test for what strategy is best for you. For more suggestions on how to create your best lease strategy, please feel free to contact me at:
jeff@cgccommercial.com. 952-955-6196