What are the best lease negotiation strategies based on your due diligence?

1 Market Analysis

Before you enter any lease negotiation, you need to conduct a thorough market analysis to understand the supply and demand, the average rents, the vacancy rates, and the incentives and concessions offered by landlords. This will help you benchmark your expectations, identify your strengths and weaknesses, and compare different options. You can use online databases, industry reports, local brokers, and site visits to gather relevant data and insights.

2 Property Evaluation

Another key aspect of your due diligence is to evaluate the physical and functional aspects of the property you are interested in leasing. You need to inspect the condition, the layout, the amenities, the accessibility, the security, and the compliance of the space. You also need to consider the operating costs, the maintenance responsibilities, the environmental issues, and the future plans of the landlord. You can hire a professional inspector, a contractor, or a consultant to help you with this process.

3 Lease Review

Once you have narrowed down your options, you need to review the lease agreement carefully and understand all the terms and clauses. You need to pay attention to the rent, the escalation, the term, the renewal, the termination, the sublease, the insurance, the taxes, the utilities, and the repairs. You also need to look for any hidden fees, penalties, or restrictions that could affect your business operations or profitability. You can consult a lawyer, an accountant, or a broker to help you with this process.

4 Risk Assessment

Another important step of your due diligence is to assess the potential risks and opportunities involved in leasing the property. You need to consider the market trends, the economic outlook, the competitive landscape, and the legal and regulatory changes that could impact your business performance or lease obligations. You also need to evaluate the financial stability, the reputation, and the relationship of the landlord. You can use a SWOT analysis, a scenario planning, or a contingency plan to help you with this process.

5 Negotiation Preparation

After you have completed your due diligence, you need to prepare for the lease negotiation. You need to define your goals, your priorities, your alternatives, and your walk-away point. You also need to gather all the supporting documents, data, and evidence that can justify your position and proposals. You can use a negotiation checklist, a proposal template, or a lease comparison tool to help you with this process.

6 Negotiation Tactics

The final step of your lease negotiation is to apply some effective negotiation tactics to achieve your desired outcome. You need to communicate clearly, confidently, and respectfully with the landlord or their representative. You also need to listen actively, ask open-ended questions, and address any concerns or objections. You can use a win-win approach, a trade-off strategy, or a concession tactic to help you with this process.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?