Things to remember when renegotiating your commercial lease agreement
We all know that moving your business premises can be a very expensive exercise and can result in unnecessary downtime meaning a loss of time and revenue for your company. But what if you have been in your current space for a long time and the rental has escalated yearly, pushing it way above what is currently being asked in the market?
A lot of people are unaware that you can renegotiate the rental, and in some cases, the terms of lease. This doesn't necessarily mean that the Landlord will accept the new terms but it is certainly a worthwhile exercise. Remember, the Landlord doesn't want to sit with an empty property or a new non-paying tenant.
When meeting with your Landlord, have a goal in mind. Know what you are wanting to achieve but be flexible in your ideas and be prepared to meet in the middle with terms that suit both parties.
Do your homework so that you know what other properties are going for in the area and more importantly what rental was achieved. Being able to show your Landlord evidence that you are paying well above the market norms will ensure that they take you seriously.
Be fair in your negotiations, you can't expect to receive without there being a benefit to the other party, namely, your Landlord. Before your meeting, look at your business forecasts for the foreseeable future and consider the longest lease period that you would be willing to sign for. Long leases are of value to any property owner as they provide security. By offering to sign a long lease term, you are more willing to succeed in your negotiations.
Ensure that these negotiations happen with plenty of time to spare (make sure to check your lease agreement for notice periods). If the negotiation is not successful, you want to be sure that you have adequate time to find new premises.
If you are uncomfortable negotiating your renewal, call on a qualified and reputable agency that has a high presence in the area. At Deal Core Property Group, we are more than happy to assist you in facilitating this discussion and providing market related reports on similar properties in the area.
Should you require assistance feel free to contact Ryan Berry on 083 603 8128 / ryan@dealcore.co.za