Negotiating Commercial Leases & Renewals FOR DUMMIES
For many healthcare tenants, negotiating a good lease or lease renewal against an experienced agent or landlord can be a challenge. While a doctor focuses on proper patient care, savvy real estate agents and brokers are specialized sales people. Their job is to sell tenants on leasing their location at the highest possible rental rate.
As explained in our new book, Negotiating Commercial Leases & Renewals FOR DUMMIES, tenants may go through the leasing process only two or three times in their entire lifetime – yet they have to negotiate against seasoned professionals who negotiate leases every day for a living. Negotiating appropriate leasing terms is vital for a doctor as the amount of rent he pays will directly affect the practice’s financial bottom line.
Whether you are leasing a new location for the first time or negotiating a lease renewal for your practice, these are some money-saving tips for healthcare tenants:
Be Pleasantly Assertive … not Passive: If you don’t take control of the situation, the leasing agent will. If you see a property you would like more information about, call and ask the agent to e-mail you the site plan and other related details. Don’t just drop what you’re doing and run over to the site. For the first meeting, have the agent come to your place of business. If you like what you hear, you can meet at the site that is for lease a few days later. Try to set viewing times convenient for you … remember, you are the customer.
Determine Your Bargaining Strength: Factors that will determine your bargaining strength with respect to you negotiating a new lease or renewal include the overall vacancy rate of the building, recent tenant turnover, your unit’s size in relation to the entire property, your business status (landlords often value healthcare tenants who stay long-term in commercial properties), your business history, and your business industry (hair salons, for example, are plentiful while pet stores are not – therefore, a pet store should command more favorable lease terms.
Don’t Telegraph Your Plans: A good football quarterback can take the snap, fake the handoff to his running back, and then pass the football to a receiver – thereby, not telegraphing his intentions, As a new massage therapy tenant, try not to speak in terms of “When I move in …”. Existing massage therapy tenants also need to keep their thoughts to themselves and not make statements such as, “When I stay, I would like the carpet replaced or a fresh coat of paint applied.” These are called buying signals and they always serve to weaken your bargaining position.
For a copy of our free CD, Leasing Do’s & Don’ts for Commercial Tenants, please e-mail request to [email protected].
Jeff Grandfield and Dale Willerton – The Lease Coach are Commercial Lease Consultants who work exclusively for tenants. Jeff and Dale are professional speakers and co-authors of Negotiating Commercial Leases & Renewals FOR DUMMIES (Wiley, 2013). Got a leasing question? Need help with your new lease or renewal? Call 1-800-738-9202, e-mail [email protected] or [email protected] or visit www.TheLeaseCoach.com.
