In past blogs, we’ve discussed different leasing aspects from insurance requirements and true square footage, to the underwriting involved with risky tenants. Now, we consider the need to negotiate (or renegotiate) a lease.
Negotiating to get the most cost-effective lease for your business’ bottom line is just as important as seeking out the best grower to buy the freshest flowers from at the right price. Hortica Retail Sales Specialist Maria Shepherd discovered one important tip to keep in mind during your talks: whether you’re renewing your lease or looking for a new location—remember, you’re the customer. That gives you a position of strength to help negotiate the best terms for your business.
In their article “Negotiating commercial leases: Ask the right questions,” featured in the May 24 SAF E-brief, Dale Willerton and Jeff Grandfield point out business owners may have to go through a leasing process only a few times over their career, but will always negotiate with people who deal with leases every day.
But you don’t have to worry. They’ve come up with these tips that could help you save money:
If you don’t take control of the situation, the leasing agent will. Here’s what to do if you see a property you like and want to learn more about:
- Call and ask the agent to email you the site plan and related details—don’t immediately go to the site
- Have the agent come to your place of business for a first meeting and, if you’re comfortable, meet at the available site a few days later
- Set viewing times that are convenient for you
Determine your bargaining strength
A number of factors can play into your lease bargaining strength:
- Overall vacancy rate of the building
- Tenant turnover
- Your unit’s size in relation to the entire property
- The percentage of the building you’ll occupy
- Your business history, status, and product uniqueness
Ask the right questions
Since most leasing agents share limited information, asking questions can help level the negotiating field. Find out:
- Who really owns the property—a local family or a distant pension fund?
- Who were the last two tenants to move in and out?
- Which tenants are not renewing their lease?
- Is the property currently for sale or will be in the near future?
If you decide the lease is right for you, remember your insurance coverage. Don’t wait until the day you go to sign the lease on a new location, only to find out you need proof of coverage called a certificate of insurance, naming your landlord on the policy. Speak with your Hortica agent and become familiar with the various types of coverages you might need to be lease compliant. We’re here to help.
For more information on protecting your business, check out the Hortica Resources section.
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