Renegotiating your Commercial Lease - Tips and Tricks

This current recession has hit many commercial property managers particularly hard.  Most, if not all shopping mall owners are doing everything they can to retain retail tenants.  Businesses that utilize office space are in much the same situation.  Most office space landlords are also in survival mode these days.  There is a role for the savvy business owner to utilize a commercial real estate broker to renegotiate their lease with their landlord.

Negotiating Tips

Most business owners negotiate every day of their lives.  They negotiate with their vendors, employees, customers, and probably every day at home as well with their family.  However negotiating when you have a great deal at stake, are under stress, or do not fully understand the landscape (such as a real estate transaction) can leave you at a disadvantage.  Imagine trying to negotiate in a foreign language that you do not speak!  That is the situation for most business owners trying to renegotiate their leases.

There are some definate 'DO's' for negotiation:

• Solicit the other person's perspective - What do you need from me on this?
• State your needs - not just what you want, but WHY you want it.
• Prepare options beforehand - have alternative resolutions in mind.
• Do NOT argue - Do not try to prove the other person wrong, it's a waste of time.
• Consider timing - right before lunch may not be the best time, consider re-scheduling in need be.
• Do not give a point without receiving something in return - For every thing you concede, you should get something in exchange.

And, there are some definate 'DON'T's' for negotiation:

• Viewing negotiation as confrontational - You are not trying to win, you are trying to work together to find a solution.
• Trying to 'win' at all costs - This is likely to cause problems in the future.
• Becoming emotional - It is important to maintain control at all times.
• Focusing on personalities - focus on the issues, not the people.
• Blaming the other side - take responsibility, their is NO benefit to arguing.

Negotiation is a tough but worthwhile skill to develop.  If you follow the tips above, you will be much more likley to have a successful negotiation that achieves your goals.