Negotiating an office on lease can be a complex and intimidating process, especially for businesses that are new to the process. However, with the right approach, you can secure favorable terms that will benefit your business for years to come. Here are some dos and don’ts to keep in mind as you begin the negotiation process:
DO:
- Do your research: Before you start negotiations, it’s important to have a good understanding of the local real estate market and what similar properties are being rented for. This will give you a baseline for what you should expect to pay and help you determine what concessions you may be able to negotiate.
- Know your budget: Determine in advance how much you are willing to pay for rent and other related costs, such as common area maintenance (CAM) charges. This will help you negotiate from a position of strength and ensure that you don’t overspend on your lease.
- Consider negotiating non-monetary terms: In addition to rent, there are other terms that you can negotiate, such as the length of the lease, the rights you have to sublet the space, and the amount of CAM charges. These terms can have a significant impact on your business, so it’s important to consider them carefully.
- Get the landlord to make concessions: Landlords are often willing to make concessions in order to close a deal, especially if you are willing to sign a longer lease or make a larger upfront payment. You might be able to negotiate a lower rent in exchange for a longer lease, or get the landlord to pay for some of the build-out costs.
- Be flexible: If you are willing to be flexible on move-in date or the length of the lease, it may be easier to negotiate a better deal. Landlords are often more willing to make concessions if they know they can count on a stable tenant.
- Seek professional help: If you are not comfortable negotiating on your own, consider hiring a real estate agent or lawyer to represent you. They can help you navigate the process and advocate for your interests.
DON’T:
- Don’t be afraid to negotiate: Many businesses are hesitant to negotiate their office on lease because they are afraid of offending the landlord or losing the opportunity altogether. However, it’s important to remember that negotiating a commercial lease is a normal part of the process and that both parties are expected to make concessions.
- Don’t neglect to read the fine print: It’s easy to get caught up in the excitement of finding the perfect space, but it’s important to read the entire lease carefully before signing. Make sure you understand all of the terms and conditions and that they are favorable to your business.
- Don’t assume that the landlord’s initial offer is the best you’ll get: Landlords often make initial offers that are higher than they are willing to accept in order to leave room for negotiation. Don’t be afraid to counteroffer or to ask for concessions.
- Don’t forget about hidden costs: In addition to rent, there are often other costs associated with a commercial lease, such as CAM charges, utilities, and property taxes. Be sure to factor these costs into your budget and negotiate them as part of the lease.
- Don’t sign a lease without consulting with a lawyer: It’s always a good idea to have a lawyer review your office on lease before you sign it. A lawyer can help you understand the terms and conditions and ensure that your interests are protected.
In conclusion, negotiating a commercial lease can be a complex process, but with the right approach and a little bit of know-how, you can secure terms that are favorable to your business. By doing your research, knowing your budget, negotiating non-monetary terms, getting the landlord to make concessions, being flexible, and seeking professional help, you can effectively navigate the negotiation process and come out on top. Don’t be afraid to negotiate, and don’t neglect to read the fine print, but also don’t assume that the landlord’s initial offer is the best you’ll get, and don’t forget about hidden costs. Finally, don’t sign a lease without consulting a lawyer to ensure that your interests are protected. By following these tips, you can successfully negotiate a commercial lease that will benefit your business for years to come.