Saturday, October 29, 2016

Allowance Tips in Commercial Leases

Remember when you were a kid and the weekend would roll around? Wasn't that the time where you eagerly awaited receiving that hard earned "allowance" you'd worked for earlier in the week? 

Perhaps it was through doing various chores around the house, cleaning up things around the yard, or looking after the things that needed attention. Bottom line ... who doesn't like to get an allowance! 

With this POST, our friends Dale Willerton and Jeff Grandfield from The Lease Coach provide us with some more great suggestions to help negotiate or renegotiate a Commercial Lease. Thanks Dale and Jeff for sharing these insights from your many years of experience!

Dale Willerton

Jeff Grandfield

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:

Lease Renewal Allowances: If you are an existing tenant, you may think that you can’t negotiate for a tenant allowance on your renewal term. Untrue! Approximately 75% of our clients get a tenant allowance on their renewals. Remember if the landlord is giving allowances to new tenants moving into the property, then why can’t you have an allowance too? Even if your space only needs cosmetic upgrades (e.g. new carpeting or a fresh coat of paint), negotiate for these as part of your renewal deal. Your tenancy, after all, is proven, plus there is less risk for the landlord putting cash into your renewal than taking a chance on a new (and unproven) tenant.

Go Slow For a Better Deal: Tenants often rush a lease deal and leave valuable incentives or inducements on the table. If you have the time to work with, I recommend that you take it. Often, The Lease Coach gets tenants more free rent, more tenant allowance, and/or a lower rental rate just by refusing to sign on the dotted line too quickly. If the landlord or agent is anxious to close the deal, you can use stalling techniques to better your position (i.e. you have to talk with your business partner first, but he/she is currently out of town). Tenants who invariably regret what they agreed to will usually tell you that the whole process happened so fast that they hardly realized what they were agreeing to.

Select the Best Lease Length: While a five-year lease term is still standard, it may not necessarily be the best term for your company. Three years, or even one year, for some tenants may be better if the cost of leasehold improvements are low enough as these are generally amortized over the life of a lease term. The agent – motivated by a greater commission – will want you to sign the longest term possible; however, the landlord may be more flexible. Choose the lease term that is best for you and your company.

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

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 or or visit

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