Should you hire a broker to negotiate a lease renewal?
Some Landlords believe they can renew their Tenants at the same rental rate that a Broker is able to negotiate.
Alternatively, Tenants often believe they can do a good job representing themselves in their renewal.
Whether a Landlord or a Tenant, your commercial real estate representative can make a solid case why you should contract an experienced broker to represent you.
I am not referring to dual agency but rather single agency where a Broker would represent either a Tenant or a Landlord.
There are many nuances too numerous to list that can affect value in a commercial real estate lease renewal.
Rental rates are for the most part determined by supply and demand.
A Broker may be aware of a space not quite yet on the market that could be ideal for a tenant whose lease is coming up for renewal.
Alternatively, if a local Tenant does not have a renewal option, might the Landlord want to know if there is a national occupier in the market who would be an ideal fit for the space?
Whether a Landlord or a Tenant, you need to know about these potential alternative options.
Building a strong case
A commercial real estate Broker can assemble comparable lease data from various sources to support a negotiation.
Your position is much stronger if you can present factual recent lease transaction information.
Our in-house market analyst keeps up-to-date absorption and vacancy statistics that can help predict which way a market is going.
These two pieces of information alone can have a profound impact on renewal strategies.
There are terms that can be easily overlooked.
If you are a landlord and the tenant has no renewal option, is this the opportunity to roll the lease into a new, more favorable net lease agreement which provides for amortization of capital improvements?
Alternatively, if you are a tenant, did you think to ask for another renewal option or some building improvements such as new flooring, paint or a free month’s rent?
Arm’s length negotiation
It may be difficult to negotiate your very best position and still maintain a good business relationship with the other party.
Real estate negotiation is what I’ve been doing every day for most of my adult life.
A good Broker knows how to tactfully achieve the desired result without stress or compromising that relationship that you may have been developed over years.
Why not ask us what our brokerage fee is to provide lease renewal representation?
I am confident if you engage us you will realize that the investment is a small price with the benefits far outweighing the cost.