You're seeking a lease extension with your landlord. How can you secure a lower rental rate?
When it's time to renew your lease, you want the best rate possible. To negotiate effectively:
- Research local market rates to ensure your request is competitive.
- Offer to sign a longer-term lease for reduced rent.
- Highlight your history as a reliable tenant to strengthen your case.
What strategies have worked for you in lease negotiations?
You're seeking a lease extension with your landlord. How can you secure a lower rental rate?
When it's time to renew your lease, you want the best rate possible. To negotiate effectively:
- Research local market rates to ensure your request is competitive.
- Offer to sign a longer-term lease for reduced rent.
- Highlight your history as a reliable tenant to strengthen your case.
What strategies have worked for you in lease negotiations?
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The key first step is to create a competitive environment and inform your Landlord that your reviewing all your options. This will ensure that the Landlord is aggressive in their proposals. It’s also useful to retain the services of a Real Estate Broker to insure that you have the benefit of market knowledge. Finally, you should put an internal committee in place to visit the potential alternative locations so that the employees are open to the possibility of relocating and not feel that the decision is being imposed on them.
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In my experience one should always keep the following in mind: - You need to start real estate process 18+ months in advance of lease expiration to obtain the most leverage possible in lease negotiations. - Having a clear and defined strategy ahead of market engagement will make sure that ultimate objectives are met. - It is not always about the face rate, all concessions should be considered in realize your net effective rate - hire a seasoned expert, like myself, to guide you through the process #StreamRealtyPartners #CRE
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Understand the value of your client’s tenancy relative to the Landlord’s cost to backfill the space (the terms and time required for the landlord to find a replacement. ) That clarifies who has the leverage and how much.
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Leverage, leverage, leverage Ensure you are well represented by a highly experienced non-conflicted intermediary that formulates a well crafted strategy and who the landlord knows possesses the authority and capability to negotiate believable alternative relocation options.
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Anticiparse en las negociaciones siempre es una buena estrategia, en algunos casos recomponer parcialmente el valor locativo en el último tramo de vida útil del contrato contra una extensión anticipada del vencimiento es un win-win para ambas partes a largo plazo, sobretodo en mercados de alta/moderada inflación. Compartir tus diferenciales como inquilino vs. la situación del mercado/competencia/real estate, el trato comercial con el propietario en este sentido es fundamental para llegar al mejor acuerdo posible.
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Take the landlords agent to a big lunch, then the Landlord and your client and their agent. If they can't give you what you want, pay for their time and move on. Say to them it's for them to take you to lunch when they want you. Await their call. Find alternatives. Move. It may be to one of their other buildings. Never burn bridges. A landlords reference may negate a deposit at the next premises. Think laterally. Be professional. Enjoy the experience.
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Estrategias hay varias, pero hay que empezar las negociaciones con suficiente tiempo, 1 año antes al menos. Durante las negociaciones todo debe estar arriba de la mesa de discusión, problemas técnicos, demanda de TA para invertir en CAPEX, situación del mercado respecto a la competencia. Es un momento clave ya que un negocio se está comprometiendo a largo plazo a una localización, entonces toda variante debe ser tomada en cuenta. De esta manera conseguir el mejor trato posible
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Comenzar negociando con mucha anticipación. Un plus adicional es si tienes planes de mejor la imagen de marca. Ofrecer capitalizar el inmueble con tus mejoras puede ser un aporte de valor. Establecer un monto fijo y un porcentaje variable progresivo adicional según tus ventas, si vienes de años de altas ganancias.
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To negotiate a lower rental rate during a lease extension, start by researching current market conditions and comparing rents for similar properties. Use this data to make a case for a reduced rate, showing the landlord how your tenancy adds value, such as being a long-term, reliable tenant. You can also negotiate for non-monetary concessions, like rent-free periods or property upgrades, which can lower your overall costs without directly affecting the landlord's income.
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For my clients with over 10,000 SF of office space I recommend starting the process 24 months in advance of the lease expiration date. The goal is to have the renewal/extension signed 12 months before the current expiration date. This gives the tenant time to relocate in an orderly manner if the landlord takes an unreasonable position on renewal terms and it makes more sense to relocate. In my experience, the shorter the time to lease expiration the more leverage the landlord has.
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