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Top Tips for Negotiating Commercial Leases - #12 Get a New Base Year on Renewal
Many companies renew their leases without engaging a professional tenant rep. Their logic is usually something like, "I know my landlord and trust him. We have been in the building for years so I don't see any reason to get a tenant rep involved and potentially get in the way of that good relationship. Besides, maybe the landlord will give me a better rental rate if he doesn't have to pay a commission."
That sounds logical, but in 27 years in the business I have never seen that actually work out to the tenant's advantage. Even in situations where the landlord says he will pay the commission to the tenant, the rent has always been over market. One recent client in Plano showed me the landlord's proposal which specifically said that they would pay her (the client) the tenant rep commission if she didn't hire one. The only problem was that the rental rate was $24.50. I just laughed when I saw the proposal. We ended signing a lease in the brand new building across the parking lot at $21.00 and that landlord was happy to pay me. The current landlord dropped its rate to $23.00 and was happy to pay ... more

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