Top Tips for Negotiating Commercial Leases - #6 Use a Proposal Comparison Spreadsheet

Commercial Real Estate Agent with REATA Commercial Realty, Inc. Texas 537349

Using a proposal comparison spreadsheet has many benefits, but the most important one is that it helps to keep you focused on what really matters. When you get deep into the search for the right property and are negotiating with several landlords at the same time, it's pretty easy to overlook details. And sometimes the detail you overlook may be one which you said we really important when you started. With a comparison spreadsheet, you can list all the important criteria and then start filling it in as you get proposals. If something is missing, it's easy to see it.

Make each prospective landlord aware that you will be weighing and comparing their lease proposal using this spreadsheet. Decisions rarely come down to a single issue, so the landlord needs to know that his proposal will be evaluated on all the items you requested in your Request for Proposal. So obviously, the RFP you send the landlords needs to be detailed and request all the items in your comparison spreadsheet. If you must have an address in Frisco, Plano or Addison, put a place on your spreadsheet for the city in which the property is located.

Use the resulting cost comparison as your primary negotiating lever with each landlord to bring down the cost of the competing sites. Input key factors such as base rent increases, tax and operating escalations, and other cost areas that increase over time. Use the comparisons to eliminate, reduce, or cap each item with each landlord to improve their offers. If a landlord doesn’t give you critical information needed, threaten to remove that property from the list of options. Easier said than done if that's the preferred property.

Ensure that each landlord provides you with all the key cost factors you need to accurately compare options. This should apply to non-economic issues as well such as tenant improvements and options to renew, expand, and terminate. If you use a tenant representative (tenant rep), he/she should do this as a standard course of business.

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Bob Gibbons

REATA Commercial Realty, Inc. | 1211 E. 15th Street, Plano, TX  75074

972-468-1946 p | 866-439-8015 f | 972-984-8580 m |




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