Hire a CRE Agent to help with your Lease Negotiation
You’ve been in business for almost five years and have outperformed most of your competitors… you’re still in business. You have a lot to think about as you move forward. The commercial lease is an important but frequently disregarded aspect of business. A commercial lease is one of a company’s most significant investments, with larger leases costing millions of dollars throughout the lease term. When these larger leases are properly negotiated, they can save hundreds of thousands of dollars.
Hiring a commercial real estate professional with experience representing tenants for new leases and lease extensions is the first step in understanding your possibilities. Why should you work with an agent? Although you may have gone through multiple lease discussions for your firm, a professional agent will have handled hundreds of leases and will know the specifics of the negotiations better than anyone else, including the landlord. More importantly, a commercial agent will have knowledge of the current deal flow, market conditions, and concessions offered by your landlord and others in the area with similar lease rates. The average person does not have access to this information which makes it harder to negotiate a better deal without an agent.
A qualified agent will examine your lease renewal options and evaluate whether it is best for you to exercise it or if they believe they can save you money or find you a better deal. There’s nothing to lose. A little-known fact is that most landlords have budgeted for paying a commission, and in many cases, a commission is already scheduled to be paid to the original broker if you exercise your option. In fact, most landlords recognize that paying a tenant’s agent’s fee is preferable to losing a good tenant.
When should you begin renegotiating your lease? Don’t put it off until the last minute. Most lease options require you to exercise the option between three to six months before the lease expiration date, and in other cases as far as nine months. A landlord understands that finding a space and moving takes time, so if you wait until the last minute, the negotiation power is entirely on the landlord’s side. Instead, start talking to your landlord a year before your lease expires. This gives you more bargaining power, and it also allows you to investigate alternative possibilities if the landlord’s stipulations are unreasonable. To get help with negotiating your lease, contact Payas CRE and our team of real estate experts will help you navigate and negotiate your new commercial lease.