Lead Time - and Timely Lease Negotiation Tips

They say that in business, TIMING is Everything!  

Businesses certainly need to have their products or services available for customers when the customer is ready to buy. And when it comes to the location that your business will operate from, did you know that TIMING also comes into play?

Here with some great tips with respect to the TIMING involved in your Commercial lease, are my friends from The Lease Coach. Please enjoy this Guest Post to our BLOG and feel free to share it with those you feel could benefit within your circle of contacts.

Negotiating Commercial Leases & Renewals For Dummies

Commercial Leasing Tips for Commercial Tenants

By: Jeff Grandfield – The Lease Coach 

For many business-owners, negotiating a good lease or lease renewal against an experienced agent or landlord can be a challenge. While an entrepreneur focuses on marketing and managing, 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 (co-written with my colleague, Dale Willerton), 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 an entrepreneur as the amount of rent he pays will directly affect the business’ financial bottom line. 

Whether you are leasing a new location for the first time or negotiating a lease renewal for your business, these are some money-saving tips for tenants:

Allow Sufficient Time: For a new location lease agreement, get started nine months in advance to avoid unexpected situations and/or delays. Lease renewal negotiations should begin a minimum of 12 months before the term expires. If you can’t get a decent renewal rate, would you rather find out that you need to move with three weeks or six months left on your lease term? In both circumstances, time will be your ally or your enemy – depending on how you use it.

Leverage the Lease “Term” Into Incentives: Since most lease deals are negotiated through commercial brokers or commissioned leasing agents, the lease term (or length) is a big negotiating chip for the tenant. Even if you want a five-year lease, start negotiating for three years. Since the agent’s commission is generally five percent of the base rent calculated on the first five years, you can now control the agent’s paycheque. After the first or second round of negotiations, you may be able to leverage a lower rental rate, more free rent, and more incentives by “agreeing” to take a five-year term rather than three. Additionally, most agents will get a two percent commission on years six – 10 and sometimes even on renewals.

Talk to Other Tenants: Some of the best inside information available is from tenants already leasing space in a building. Introduce yourself as a prospective tenant and ask for an honest opinion of the landlord, the level of property maintenance, and the rental rate charged. What you learn here may surprise you; use this information wisely in your negotiations.

For a copy of our free CD, Leasing Do’s & Don’ts for Commercial Tenants, please e-mail your request to DaleWillerton@TheLeaseCoach.com.

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 DaleWillerton@TheLeaseCoach.com  or JeffGrandfield@TheLeaseCoach.com or visit www.TheLeaseCoach.com.

 Thank you Jeff and Dale for another great post with insights that will help our readers.

* QUESTION:  When is the BEST time for a business owner to work on their Business Plan?  

ANSWER:  It's always better to have your Business Plan in a state of readiness in order to quickly make specific details available to those requiring the information. Let's talk about your Business Plan needs and help you better prepared for the next Opportunity or Challenge ahead!

NOTE: For a closer look at the services provided by Pro-Vision Solutions Inc. and how we can assist ... visit our Website: www.pvs4u.ca

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