Your Guide to Negotiating a Commercial Lease Renewal

If you are currently in a commercial lease that is up for renewal, there are some things you may want to consider. The terms of your commercial lease can have a big impact on your business and profit margin. When renegotiating your lease it is important to take the time to negotiate the most advantageous deal possible for the long term health of your business.

Commercial Lease Renewal Tips

• First and foremost you must learn the fine art of negotiation.  In order to leverage yourself on the playing field you need to create a bit of competition.  You have to allude to the fact that other locations are competing for your tenancy.  In order to do this you need to create options for tenancy by applying for several new location spots.  In order to create the healthy competition that is needed, you should be sure to casually mention that many landlords are vying for you to go to their locations.

• Another idea that you might consider when negotiating the lease is to negotiate some sort of lease renewal incentives.  You never know where this might get you.  Think back to when you first started leasing the space from your landlord.  Were there any lease incentives that were given to you?  Did you get free or reduced rent for the first month?  Now, consider what incentives that the landlord will give a new tenant.  If you are unsure, then you can do something that brings another avenue of negotiation – speaking with other tenants.

• To speak, or not to speak to fellow tenants in a commercial building is the question.  The answer is that you definitely need to speak with the other tenants for several reasons.  First, you will be able to gain perspective on if they are receiving any perks from the landlord that you are not.  Second, you will get better insight on how they renegotiated their leases and what worked for them regarding re-negotiated rental rates.  Finally, you will have a good idea on what incentives they were offered when they first moved into the building.

• Never settle for the same rental rate that you already have.  You will need to cleverly remind the landlord of the value that your business brings to his/her commercial property.  Get creative with your research and find out whether or not your landlord is leasing space to new tenants at a reduced rate.  Additionally, consider drafting key points that will nicely remind your landlord of how his/her property being a household name in the minds of consumers was due in part to your tenancy at that particular property.

Getting Help

The key negotiating your commercial lease is to have the facts straight, create leverage and be confident. You should also consider contacting an experienced commercial real estate attorney. Your attorney can help you negotiate the best terms and can protect your interests by ensuring your lease is fair.