How can you address power imbalances in commercial real estate negotiations?

1 Identify your strengths and weaknesses

Before you enter a negotiation, you need to assess your own position and the position of the other party. What are your goals, interests, and alternatives? What are their goals, interests, and alternatives? What are the sources of power for each side? For example, power can come from market conditions, financial resources, reputation, expertise, relationships, or time constraints. Identify your strengths and weaknesses, as well as the strengths and weaknesses of the other side. This will help you prepare your strategy and anticipate their moves.

2 Build rapport and trust

One way to reduce the impact of power imbalances is to build rapport and trust with the other party . Rapport is the feeling of connection and mutual understanding that can facilitate communication and cooperation. Trust is the belief that the other party will act with honesty, integrity, and fairness. You can build rapport and trust by showing respect, empathy, and professionalism, by asking open-ended questions and listening actively, by finding common ground and shared values, and by being transparent and consistent.

3 Use objective criteria and standards

Another way to address power imbalances is to use objective criteria and standards to evaluate the offers and proposals. Objective criteria and standards are external sources of information or authority that can justify your position and support your arguments. For example, you can use market data, industry benchmarks, legal precedents, or expert opinions to show why your offer is reasonable and realistic. Using objective criteria and standards can help you avoid emotional or subjective reactions and focus on the facts and logic.

4 Seek creative solutions and trade-offs

Sometimes, power imbalances can create a win-lose situation, where one party feels that they have to accept a bad deal or walk away. However, you can try to turn a win-lose situation into a win-win situation by seeking creative solutions and trade-offs. Creative solutions and trade-offs are ways to expand the pie and create value for both sides, by finding new options or exchanging concessions. For example, you can offer or ask for non-monetary benefits, such as lease terms, amenities, services, or warranties, that can make the deal more attractive and balanced.

5 Know when to walk away

Finally, you need to know when to walk away from a negotiation that is not going in your favor. Walking away is not a sign of weakness, but a sign of strength and self-respect. You need to have a clear idea of your bottom line, your best alternative to a negotiated agreement (BATNA), and your reservation price, which is the minimum or maximum amount that you are willing to accept or pay. If the other party is not willing to meet your reservation price or offer a better deal than your BATNA, you should walk away and pursue other opportunities.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?