| 1) Consider the potential positive impact of lease renegotiation upon your business. Get clear about your motives, and understand the exact nature of your present day circumstances. Compared to say one, two or even three years ago, what percentage are the gross sales down? What percentage is the cost of doing business up? What percentage are net profits down? By what percentages have the pedestrian traffic and phone calls coming into your business (or the vehicular traffic into your shopping center or neighborhood) decreased? Thoroughly review and evaluate your current lease. This is a time to seek to renegotiate more than just the economic terms of your current lease. Economic advantages you can enjoy by renegotiating your lease successfully include, obviously, a reduction in your rent. But there are also the possibilities of reducing or eliminating your annual rent increase and your contribution to common area or triple net expenses. You can also gain favorable non-monetary advantages to lease renegotiations. Have your landlord contribute to or make capital or cosmetic improvements to your leased premises. If you are in a shopping center or industrial park, have your landlord make improvements to the common areas of your center or park. How about your landlord's completion of any deferred maintenance that has gone unattended? Reduction or elimination of the securitization and/or the guarantee of the lease will become helpful if economic times get tough and you need to escape your lease. A real estate professional can seek to increase your current lease term and even add some lease option periods. Inversely, they can seek to reduce both the current lease term and lease option periods. Is it time to increase or decrease the size of your leased premises? What about an option or right of first refusal should the space next door become available? Lastly, many tenants don't consider obtaining more favorable terms related to the possible future sales of their businesses until it's too late. Remember: Your business is located in your leased premises, and according to your current lease, the landlord has specific rights that could impede the sale of your business. 2) Ask yourself, "Are there changes in my real estate market?" Look to identify comparable property and current market rents and terms. Evaluate your lease terms in comparison to those of comparable current market leases. Determine current vacancies in yours and in comparable properties. Once a review of comparable property has been completed, it will become immediately apparent if rental rates and other economic terms have declined. If a decline has occurred, this is another perfect justification for renegotiating your current lease. Typically I recommend presenting your landlord with evidence of the current local rental rate reductions. This also indirectly serves to put your landlord on notice that there are viable alternatives to you remaining their tenant. 3) Focus on your landlord. Discover the concerns and motives of your landlord to reveal the best approach to take. As simple as it might sound, let your landlord do most of the initial talking. The more you ask and learn about your landlord's circumstances, the more you can understand what motivates them. After you have taken these three steps to prepare, then target the specific results to be produced. Develop and commit to a strategy to achieve those targeted results, and then formally engage the landlord in renegotiation of the lease. To learn more about the next steps in to a successful Commercial Real Estate Lease Renegotiation or to engage professional services in this matter contact me. By Steven Smith Steven Smith, President of Steven Smith, Inc., is a licensed real estate broker. Mr. Smith draws from 30 years of experience to prepare his commercial clients for lease renegotiations. Here, he offers three critical steps that will increase the odds of a successful renegotiation. Steven Smith, President of Steven Smith, Inc., offers a full range of commercial real estate brokerage services, including a commercial lease renegotiation service, to clients anywhere in the U.S.A. To learn more go to: http://www.RenegotiateCommercialLease.com/ and http://www.StevenSmithInc.com/ |
| Author: Steven Y. Smith |
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Author Bio:
Steven Y. Smith is an expert on this subject. Steven has written several articles in the past on this topic. |
| This article can be searched using: retail, Commercial, renegotiate, office, industrial |
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