Commercial real estate negotiations are just one of the many tasks that small business owners everywhere have to deal with. They can have a huge influence on your company’s growth and daily operations. Often, people who have very little experience in sales may find negotiating to be a challenge. That’s why it’s important to learn everything that you possibly can to get the best deal for your business. Follow some of these tips and you’ll be able to confidently take on commercial real estate negotiations in no time.
Real Estate Negotiations Made Easy
Some Homework
Many people don’t realize that most of the work happens before you even get to the negotiation table. Before there’s any arbitration, make sure that you research the average prices that the type of commercial real estate space in question typically go for.
Professional Assistance
Aside from the many websites where you can gather information, consider consulting a commercial real estate broker who can provide your region’s historical sales data.
While real estate agents can offer some extremely useful insight, it might be of some benefit to also seek the expertise of a lawyer. An experienced attorney can assist you in giving advisement, proven tactics, and contract explanation.
Know What You’re Negotiating
Also, compile a checklist of your needs and wants that you are looking for in the property. Use it to better organize and prioritize exactly what you are negotiating so you don’t forget and leave any terms on the table.
Work out the Details
Before agreeing on any price, find out exactly what the total cost includes. Besides cost per square foot, you may incur charges for property taxes, insurance, maintenance, waste collection, and utilities. Make sure you know specifically what’s built into the total cost, what’s paid to the landlord, and what’s included in the rent.
Restrictions
Consider your business and learn about any restrictions there might be from zoning laws and regulations. Also, if the space needs to be modified to suit your needs, understand what exactly can be done, who’s going to pay for it and then who’s going to manage the work.
Subleasing
If you anticipate subleasing some or all of your space, make sure the contract allows you to have those rights. This can help if your company needs to unexpectedly move. Also, if you lease more space than needed for future growth, a sublease will assist you in covering the cost of rent in the meantime.
A Final Word of Advice
Usually, a longer lease is the best way to negotiate the contract on your terms. However, if your business has rapid growth and a move is needed, a long-term lease will end up hurting your company in the long run. The most flexible route would be to sign a shorter lease with renewal options and a set cap on future rent to prevent an increase.
No matter what, everything in real estate negotiations should be put into writing. Negotiating with a verbal agreement is never wise. Always have terms written up and reviewed by your lawyer. Your business will thrive for it.
