Commercial Lease Negotiation Tips

A reluctant buyer gains negotiating stature and a landlord can become fearful that he will lose your deal so he becomes much more flexible in terms and conditions. If you have hired a consultant, who lets landlords know that other buildings are competing for your tenancy, you can afford to be reluctant in negotiations. Your buyer broker can let the landlord know that other proposals have been better than his and you may be leaving.

Don’t forget to use the visible flinch when a landlord proposes a rental rate in person. Otherwise the landlord will become a tougher negotiator. The flinch is best in person but can be very effective over the phone.

Next use the vice negotiating ploy and say “Look, I know you’ve put a lot of work into your proposal but you’ve got competition. Just to fair to you, what’s the very lowest rent you’ll take?” Often the landlord will give up about half of his negotiating range. A landlord who quoted you a renewal rate of fourteen dollars but could still make money at ten dollars will then tell you he could maybe go as low as twelve dollars.

If he doesn’t come down, you can put him on notice by telling him “You’ll have to do better than that”. In Commercial Lease Negotiation when a landlord gets huffy, confrontational or obstinate he can often be moved off his position by the use of the sentence “Look do you guys still want to do the deal?”

The landlord may look at you as if you are crazy and say something like “Of course, I want to the deal!” Your retort “Well, you’ll have to do better than that. Always be a reluctant buyer. Never be eager for anything. Never, never, never let a landlord know his building is anything just one building of others you are considering even if it’s your preferred or indeed only choice. This’ll make you a lot of money. Remember every dollar saved on rent is a dollar in your pocket.

The absolute worst thing that can happen to a landlord in a Commercial Lease Negotiation, no matter what an exorbitant deal he proposed is for a tenant to accept it. He always thinks “I could’ve done better”.

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