Good morning and welcome to Episode 63 of The LeaseSmart Commercial Real Estate Podcast, brought to you by LeaseSmart.com. Your host is Craig Melby, the founder of LeaseSmart, whose objective is to find companies the best facilities and get them the best terms, making their business more profitable and less vulnerable to future, unpredictable circumstances.
In this Friday’s podcast Craig shares an experience he just had negotiating a lease deal at the last minute. As Craig has taught us before, it’s best to begin negotiations about one year before your current lease expires because that is when you have more leverage. If you wait until your lease is expiring, landlords know you don’t have time to move somewhere else, and they won’t be very motivated to negotiate. This is precisely what happened to the owner of a nail salon who was the friend of a friend of Craig.
Craig was approached on behalf of a business owner who was desperate for help negotiating the renewal lease their landlord had given them. They were completely unable to meet the terms financially, and what’s worse, they were unable to negotiate for themselves given that they found themselves in the 11th hour, so to speak.
Now, this is not ideal, as anyone will tell you, but Craig agreed to help. There are a few things to clarify about these late negotiations. One, landlords won’t appreciate it one bit if a leasing agent enters the conversation last minute because they’ll risk having to pay a commission. And two, with little leverage it is very challenging for the leasing agent to push for changes. Craig explained to the landlord that he wasn’t needing a seller commission and that really helped put the landlord at ease. Also, Craig regained some leverage by explaining that the tenant would absolutely be forced to leave the location under the current renewal conditions and that there were comparable sites to which they could move later on.
Even though they were under the gun, Craig succeeded in saving the business owners a lot of money and securing a renewal so they could stay with a lease that was more fair and favorable.
If you need an advocate, too, like the business owners in this experience, give Craig a call if you’d like to learn more. He can be reached at 800-962-2419.
Thanks for tuning in and have a fantastic day!
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Craig Melby, CCIM, Founder
(800) 640-9141 CraigMelby@LeaseSmart.com
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