You certainly can negotiate on commercial property! When you select a property to invest in, negotiating is a large part of the process. You can negotiate various elements from the price of the lease to the payment terms to the lease length.
As a team that owns and sells properties, we have a strong understanding of the negotiation process. Follow these tips for a smoother bargaining process.
Make a List of Your Wants and Needs
While you should aim to get as many of your desirables as you can, it’s not always possible to get every single thing you want in a negotiation. Make a list of what your “must-haves” are and what your “wants” are. This will help you decide what you’re willing to compromise on and what your must-haves are.
Know the Market Well
It’s vital to know the trends, expectations, and rates of today’s market in order to negotiate effectively. If you don’t know the current trends, then what you’re asking might be too much for what the landlord is willing to offer, or you may be short-changing yourself. Especially with the way the pandemic has affected CRE, it’s even extra significant to know the market these days.
Making sure there is flexibility within the term agreement is vital. You never know what the future might hold for your company, and while you may have a vision for it, it may end up panning out differently. Therefore, the language within the agreement should be flexible, including discussions about early terminations and changes. You want to avoid being strictly locked into an agreement that ends up not working out.
Know the Property Well
Thoroughly investigating your new potential piece of real estate is vital to do before negotiating. If you realize certain factors such as the building being really old, major renovations being needed, safety code violations, or if the property value is expected to decrease over time, you may be able to use that as reasoning to bargain. The better informed you are about the ins and outs of the property, the more effectively you’ll be able to negotiate favorable terms.
Remember to Always Be Respectful
While seemingly self-explanatory and obvious, this is oftentimes a rule in negotiations that people can forget about. Negotiations can get heated or frustrating, especially if the two parties are struggling to reach an agreement. However, no matter how tense it may get, always treating your potential landlord with kindness and respect will serve you well. The last thing you want is a potentially great deal to fall through because the other party feels disrespected.
Work With the Right Representatives
Most people don’t know the commercial real estate market like the back of their hand or the best ways to negotiate a great deal – but that’s what we’re here for! When you work with Frontline Real Estate Partners you’ll have full-service real estate experts working on your team, giving you the highest chances of working out the best possible lease agreement.
Don’t negotiate alone; for commercial real estate brokers in Chicago who you can trust and depend on, call us today.