For both tenant and landlord, a lease renewal should be treated like any other lease negotiation. This includes a thorough search of the marketplace for suitable spaces and a good understanding of which landlords would be most interested in bidding for your tenancy.
Lease renewal time is also 'decision' time.
Consider this: Landlord’s raise rents because they think they can…reasoning that the costs and inconvenience of moving will keep most tenants from relocating.
The most effective strategy to combat a rent increase is to know what other leasing opportunities are available and use this knowledge to negotiate lower rates (and other concessions) from your landlord. It is the landlord's perceived threat of your vacating the building, and the costs to replace your tenancy, that generates the leverage necessary to renegotiate favorable terms and conditions.
Savvy business people, lacking the time and expertise to acquire accurate information about vacancies (including vacancies in your current building) and market conditions on their own, retain me to do the research, advise them and represent their interests at the bargaining table.
Many times landlords offer better deals to new tenants.
Your current landlord should understand that, in order to retain your tenancy, he/she will have to agree to extend to you the lower of 1. The rates, terms and concessions they would offer to attract new tenants or 2. Rates, terms and concessions equal to those you could reasonably obtain from landlords of other buildings.
The landlord would be well-served to treat your request seriously, for to lose you would mean they would have to ‘re-tenant’ your space.
'Re-tenanting’ your space can be quite expensive. In addition to the immediate interruption of your income stream, a landlord can expect to incur the following out-of pocket expenses to ‘re-tenant’ your space: Marketing costs, leasing commissions, legal expenses, tenant improvement costs, concessions (free rent, reduced rent, etc.) and an indeterminate period of vacancy.
You are reasonably entitled to offset a portion of these potential expenses against your future rental obligations.
Start the re-negotiation process early.
Begin the process 6-12 months prior to the expiration of the lease term and never reveal your potential leasing choices to either your landlord, his/her agent/brokers or employees. This includes the building’s property managers, cleaning staff and parking attendants.
Instruct your staff not to discuss your lease or your intentions with anyone and always utilize the services of an experienced tenant representative as your spokesperson..
Refer all inquiries from you landlord or his/her agents to your designated leasing representative.
I invite you to call me at 480-998-7998 to learn more about this service.
Remember...when landlords compete for your tenancy you win!
Stephen A. Cross, CCIM owns CROSS Commercial Realty Advisors and represents business owners, healthcare professionals and corporate decision-makers in matters involving the lease and purchase of commercial real estate. Contact: 480-998-7998; firstname.lastname@example.org.
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