Getting ready to negotiate on a commercial lease? Many business owners are surprised at how long it takes to arrive at agreements and complete lease transactions, but the process can be smoother and simpler when you follow these simple tips:
1. Start Early
Waiting until the last moment to begin negotiating your lease puts you at a disadvantage. If things fail to workout with your current or prospective landlord, you need to have enough time to explore other options and not feel rushed to find an alternate location. In most cases, you should start thinking about your new lease 6 months before your current lease expires or before you plan to move to new office space.
2. Get Everyone on Board
Before you begin considering a lease, gather your entire in-house team together to discuss the process. Include members of your financial team, your operations team and your key managers and officers to gain insight into what your needs are. Make sure you have a clear picture of what you require from your office space and how much you can afford to pay every month before you begin negotiating.
3. Go Paperless
Trying to chase down paper documents is time consuming and inefficient. Use Dropbox or Google Docs to share copies of contracts, market research information and other important documents both internally and externally. The 'Track Changes' feature on Microsoft Word will allow everyone to see what edits have been made, eliminating the hassles of trying to read all that red ink.
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4. Have an Expert on Your Side
A tenant rep broker can be an incredible help to your business during lease transactions. With expert knowledge of the market, a tenant rep broker knows what's fair and acceptable in a lease. He or she can provide you with an unbiased opinion and act as your advocate during negotiations. The landlord pays the fee for the tenant rep broker's services, so having one at the table won't add extra costs to the process.
5. Keep Things Separate
Having the dates, terms and business points in one document and legal terms in another makes it easier for your team to analyze the contract. Your legal department or attorney can analyze their part, while your business team works on the other. This can greatly streamline the process and allow for a speedier resolution.
6. Be Prepared to Negotiate
In an ideal world, a fair set of terms would be easily agreed upon with a landlord, but in most cases, negotiations will be needed to resolve issues with one or more parts of the lease. Before you sit down with the landlord, know where you can be flexible and where you can't afford to give. This way, you will be able to say definitively what's on and off the table at the negotiation. Being prepared to concede in some areas will make you more likely to be able to win with the points of the contract that are deal breakers from your perspective.
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