Commercial leases tend to get pretty complicated, and there are many details to keep in mind when trying to negotiate a better price. From the flexibility of choosing to make a deal with an independent landlord, to the smaller details you have to remember in order to gain a favorable lease, there will certainly be a lot of ground to cover.
Let’s explore 7 tips that will help you negotiate a better lease for your retail space.
1. Know Your Budget and Requirements
It’s good practice to know what you want before going into the negotiation. When you negotiate a retail store lease, make sure you have a precise number in mind when it comes to your budget, and make a detailed list of all the features and advantages you wish your business to have.
2. Get a Good Lawyer
An attorney is not needed in residential lease negotiations, but having one around is handy when negotiating a commercial lease. A commercial lawyer will have a firm understanding of the contract and guide you on making the best decision regarding your new retail store lease.
3. Do Your Research
The property you want to get might look great according to all appearances, but there can be a lot of issues hidden behind the scenes. Always do your research on the area and individual space before shaking hands on a commercial store lease. Check out the building’s tenant mix, neighbors, and other issues, like the neighborhood and parking spaces available, that could impact the success of your business.
4. Lower Your Rent by Negotiating a Longer Lease
If you’re renting a store, chances are you want to keep an established and reputable business for the long haul. Instead of sticking to a shorter time frame, negotiate a longer lease term in exchange for a better base rent.
Of course, your choice should depend on how well your business is currently going. For a newly established businesses, it will normally be a better option to focus more on a favorable termination clause even if it means shortening the lease term from the standard 3-year to 1-2 years.
5. Take Your Time with the Negotiations
Some business owners are in a hurry to get into their new space, others allow themselves to be pressured into signing early. That’s a pretty serious mistake!
Take your time, do your research and evaluate every detail of the lease with the help of your attorney or a knowledgeable real estate agent. Rushing the deal can leave you with issues you didn’t even know are possible, and it could cost you a lot of money in the long run if you’re not careful.
6. Have an Exit Strategy
A key mistake that many business owners make is to forget about the termination conditions. Low profits or simply the desire to move your business to a new location can lead you to terminate your lease early. So, make sure you fully understand all the clauses that would impact you and your business, should you attempt to break the lease.
7. Negotiate Favorable Conditions
You don’t always have to stick to the offer that was placed before you. You can ask for a competitor clause, inquire about what leasehold improvements the space allows for, look at renewal conditions and ask for a better option, and talk to your attorney about what other choices you have.
In many cases, the landlord will be more than happy to change some of the smaller clauses of the lease, as long as it leads to a successful deal.