It's possible for any company to land an excellent deal. However, if your company isn't using specialized commercial real estate software, you’re at a disadvantage when it comes to negotiating renewals or new leases. By utilizing the software to manage all the data you have, you will be able to both identify a good deal when you see it and counter the landlord's arguments to get him to improve his offer. Here are five ways that your commercial real estate software can land you a great deal:
1. Identify the Best Candidates for Replacement
The benchmarking capabilities built into commercial real estate software helps you to identify which of your sites are performing well and which are not. You can use utilization rankings to identify spaces that are too large and need reduction, as well as spaces that are bursting at the rafters and need expansion. On the other hand, productivity measures let you see which sites aren't hitting your company's ROI goals so that they can be shut down or replaced with more suitable space. Ultimately, getting the best deal starts with figuring out what your company needs.
2. Make Faster Decisions
While the high vacancy rates in some markets might make it seem like there is no need to rush, the best spaces at the best prices frequently attract multiple prospective tenants. Commercial real estate software enables a more streamlined deal-making process. Since you have a single repository for information, you're able to quickly see how a space lines up against your existing portfolio, calculate the financial impact of the transaction and make a decision. That way, you can get the space under a binding letter of intent while another tenant is still trying to book plane tickets for a tour.
3. Spot Good Deals with Market Data
Commercial real estate software goes beyond your portfolio of spaces and lets you load data from other buildings in the area. With market-wide data at your fingertips, you can go beyond identifying deals that are better than what you currently have. You can also tell whether or not it’s a good offer relative to the market, which means that you have the potential power to turn a good deal into an even better one.
4. Complete Financial Analyses
It can be hard to figure out whether a $32 net lease with 65 cent escalators or a $34 net lease with 35 cent escalators is a better deal over a long term, or whether to take $35 rent and $40 in TIs or $34 in rent and $35 in TIs. Doing it on the fly takes the ability to be able to project build-out costs and calculate IRRs. Commercial real estate software programs have this capability built in, letting you quickly project the total financial impact of a proposed lease. The capability also allows you toy with the variables to craft a counter-offer that best matches to your needs.
5. Negotiate Outliers Away
Understanding how a space compares to your portfolio and to the broader market can empower you to find and negotiate away outliers. For instance, if a property has $15 per square foot in estimated CAM charges when you know that you're paying $10 to $12 elsewhere in the market for comparable space, that information gives you an additional negotiating point to try to reduce the rent or get other concessions.
How to Win Your Lease Negotiations in 10 Easy Steps
If a building's proposed rent will lead to sub-optimal financial performance and you know that the landlord needs you, you can use that information to negotiate the rent down to its actual value to your business.
Take the first step to landing a great commercial real estate deal today. Try a FREE demo of REoptimizer®
