How to Win Your Commercial Lease Renewal Negotiation

How your company handles the acquisition of new sites, or the renegotiation of existing leases will have a?significant impact on your its bottom line. Consider for a moment, that next to human capital costs, real estate is typically a company's second biggest operating expense. There’s no room for mistakes.??

It is also quite typical for a corporation to have anywhere from a dozen to upwards of a hundred leases. The proper and thorough management of which can be a daunting task especially in today's rapidly changing commercial real estate market. For the moment, let's focus on?the 4?steps that will help you achieve optimum results for a lease renewal negotiation.??

?

1. Treat Your Renewals Like New Leases!??

First?let us dispel a common misnomer that lease renewals don’t demand as much analysis or due diligence than the acquisition of a new site.??

We’ll respond with a question:?Do they not both have the same exact expenses of rent and the other ancillary costs of a lease???

Obviously, they do.?Yet we often see corporations apply considerably more due diligence into the acquisition of a new site.??

Why is this??Unfortunately,?tenants often get comfortable in their space and may even have a renewal option already built into the existing lease.?Signing on may seem like a no brainier and time-saving option but is one of the most critical errors you can make in commercial real estate.

You’re essentially forging another multi-million-dollar, time-intensive deal.?Why should this be treated with any less thorough financial and market analysis than an original lease??Do the very least you can, and prepare yourself.??

Unfortunately,?companies often leave millions of dollars on the table?for a property that no longer fits their needs while better opportunities waste away.?

Read Full Article