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How can you effectively handle lease negotiation timing and logistics?

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Lease negotiation is a complex and critical process for corporate real estate (CRE) professionals. It involves balancing the needs and interests of both the tenant and the landlord, as well as managing the timing and logistics of the deal. In this article, we will share some tips and best practices on how to effectively handle lease negotiation timing and logistics, and avoid common pitfalls and mistakes.

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Jamie Heiberger Harrison

Managing Partner Real Estate law Practice
Heba Nader

Market Research Consultant - Focused on Real Estate in Egypt & MENA | Certified (PMP)?, MBA in Marketing &…
Jahanzaib Qureshi

Facility & Workplace Experience Leader| Unilever, Frieslandcampina Engro, Tapal |

1 Know your lease expiration date

One of the most important factors in lease negotiation timing is knowing your lease expiration date. This will help you plan ahead and avoid being pressured or rushed by the landlord or the market conditions. Ideally, you should start your lease renewal or relocation process at least 12 to 18 months before your lease expires, depending on the size and complexity of your space requirements. This will give you enough time to conduct market research, evaluate alternatives, negotiate terms, and prepare for the move.

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Heba Nader

Market Research Consultant - Focused on Real Estate in Egypt & MENA | Certified (PMP)?, MBA in Marketing & International Business, Certified Marketing Researcher, & McKinsey Forward Advanced Champion
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Begin the lease negotiation process well before the current lease expires, or in the case of a new lease, allow ample time before the desired move-in date. This gives both parties enough time to discuss terms without feeling rushed.

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2 Establish your negotiation strategy

Before you enter into lease negotiations, you should have a clear and realistic strategy that aligns with your business goals and budget. Your strategy should include your preferred lease term, rent, incentives, options, and other clauses that are important for your operations and flexibility. You should also have a BATNA (best alternative to a negotiated agreement), which is the most attractive option you can pursue if the negotiations fail. Having a BATNA will help you assess the value and risks of each offer, and strengthen your bargaining position.

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Jahanzaib Qureshi

Facility & Workplace Experience Leader| Unilever, Frieslandcampina Engro, Tapal |
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BATNA (Best alternative to Negotiated agreement) is great strategy, What if negotiations are failed, you must have the options, following are just examples of BATNA. 1. Remote work arrangement 2. Co working Spaces options, there are lot or organization which offer monthly packages to use office 3. Temporary lease extension so that you have time to search other option.

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Heba Nader

Market Research Consultant - Focused on Real Estate in Egypt & MENA | Certified (PMP)?, MBA in Marketing & International Business, Certified Marketing Researcher, & McKinsey Forward Advanced Champion
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Both the landlord and tenant should clearly understand each other's objectives and constraints. The landlord might be focused on maximizing rental income and minimizing vacancies, while the tenant may seek favorable lease terms, rent, and flexibility.

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3 Communicate effectively with the landlord

Communication is key to successful lease negotiations. You should maintain a professional and respectful relationship with the landlord, and keep them informed of your needs, expectations, and concerns. You should also listen to their perspective, and try to understand their motivations and constraints. By communicating effectively, you can build trust and rapport, and facilitate a win-win outcome. However, you should also be careful not to reveal too much information, or commit to anything prematurely, as this could weaken your leverage or limit your options.

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Heba Nader

Market Research Consultant - Focused on Real Estate in Egypt & MENA | Certified (PMP)?, MBA in Marketing & International Business, Certified Marketing Researcher, & McKinsey Forward Advanced Champion
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Outline a timeline for the negotiation process, including key milestones such as initial offer, counteroffers, final agreement, and lease signing. This timeline should be realistic and mutually agreed upon.

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4 Use a broker or a consultant

Lease negotiation is a specialized and time-consuming task that requires market knowledge, negotiation skills, and legal expertise. Unless you have an in-house CRE team that can handle it, you may benefit from hiring a broker or a consultant to represent your interests and guide you through the process. A broker or a consultant can help you find and evaluate potential spaces, negotiate favorable terms, review contracts, and coordinate logistics. They can also act as a buffer between you and the landlord, and handle any issues or disputes that may arise.

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5 Plan for contingencies

Lease negotiation is not a linear or predictable process. It can be affected by various factors, such as market fluctuations, competition, regulatory changes, or unforeseen events. Therefore, you should always plan for contingencies, and be prepared to adapt and adjust your strategy accordingly. For example, you should have a backup plan in case your preferred space is no longer available, or your landlord changes their offer. You should also have a contingency budget in case of unexpected costs or delays.

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6 Monitor and document the process

Finally, you should monitor and document the lease negotiation process, and keep track of the progress, milestones, and agreements. This will help you avoid confusion, misunderstanding, or miscommunication, and ensure that both parties are on the same page. You should also document any changes or amendments to the original contract, and obtain written confirmation from the landlord. By monitoring and documenting the process, you can ensure that the lease negotiation is transparent, accountable, and compliant.

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7 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?

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Jamie Heiberger Harrison

Managing Partner Real Estate law Practice
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If you want to move a lease along effectively and in short order, make sure that you verify the Terms with your client for accuracy and missing points. Next, I generally recommend that the lawyers iron out as much of the legalize as possible before sharing with their clients to avoid redundancy and unnecessary turn arounds. With that stated, please be sure to obtain your clients approval prior to sending out without their review. Further, explain that Clients are not bound until they execute and that you will advise the other lawyer that the mark up is subject to further change. An early search of the municipalities to see that the use complies with the CO & verify there are no liens, violations or judgements that would impede the use.

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How can you effectively handle lease negotiation timing and logistics?

1

2

3

4

5

6

7

1 Know your lease expiration date

2 Establish your negotiation strategy

3 Communicate effectively with the landlord

4 Use a broker or a consultant

5 Plan for contingencies

6 Monitor and document the process

7 Here’s what else to consider

Corporate Real Estate

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How can you effectively handle lease negotiation timing and logistics?

1

2

3

4

5

6

7

1 Know your lease expiration date

2 Establish your negotiation strategy

3 Communicate effectively with the landlord

4 Use a broker or a consultant

5 Plan for contingencies

6 Monitor and document the process

7 Here’s what else to consider

Corporate Real Estate

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