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PRACTICE MANAGEMENT
Leveling the Playing Field in Your Next Office Lease Negotiation
By Fred Schaard
Carr Healthcare Realty
The current commercial real estate market has been dramati- cally affected by the economy in the past several years. This has resulted in a very favorable environment for tenants, as landlords are extremely moti-
vated to attract new tenants and retain existing ones—especially high quality tenants such as health- care practices. Some of the current opportunities include reducing your monthly rent payment, upgrad- ing your office’s appearance through an improvement allowance, as well as obtaining free rent and other favorable concessions.
One of the keys to a successful negotiation is to take advantage of the free services of a real estate broker or agent. This is important because most landlords are in the business of real estate and typically have the upper hand when negotiating with tenants directly. Additionally, the majority of land- lords hire a real estate broker to represent their
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interests and provide expertise. Though dramatic concessions are available, a specific posture and negotiation strategy are paramount to achieving the best possible terms.
When the time comes to evaluate your current lease situation, you’ll need to consider the pros and cons of renewing the lease in your current location versus relocating to a new property. Since economics and concessions will have a dramatic impact on the decision, it is essential to understand all of your available options and implement a strategy to leverage them. It is critical to the success of your negotiation that your landlord knows that you have the option to relocate, which means that you need to begin negotiations well in advance of your lease’s expiration; ideally 9 – 12 months before your current term ends.
When you begin negotiations, you have two options available to you: You can work with the landlord’s agent and represent yourself, or you can hire a real estate broker. Here are some things you need to know if you choose to represent yourself in a lease negotiation.
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