Lease negotiations are serious business. Even relatively small leases can run into the millions of dollars when you include the cost of moving and tenant improvements. Most landlords come to the table with expert-level market knowledge, prepared with sharp attorneys and professional lease negotiators on their side. When you go toe-to-toe with them, even your sharpest corporate counsel may not be able to keep up. To succeed, you need an experienced lease negotiator with the skills and market knowledge to be able to meet the landlord on every point and help you prevail. Here's what to look for:
No Conflicts of Interest
Your tenant representative shouldn't be the landlord's broker or a member of his broker's team. While it might seem more convenient to use a single source for both sides of the lease negotiations, you'll almost always come out behind doing this. It's important to have a partner that puts your interests and needs first.
Market Knowledge
Your tenant representative should know how leases get done in the market. This way, you can prevent a landlord from slipping terms into the lease that might seem normal, but are actually extremely unfavorable. For example, some parts of the country use triple net leases for industrial space while others still use a more tenant-friendly modified or industrial gross structure. If you come from a triple net market and don't know you're in a gross market, you could end up signing a lease that is significantly above market.
Recent References
No matter how good you think your lease negotiator might be, the best way to ensure that he can meet your needs is to have proof that he's done the same thing for many other companies in your situation. Furthermore, experience 5 to 20 years ago isn't the same thing as being able to put deals together today. It's reasonable to request and follow up with recent references that can tell you about successful negotiations for new leases and renewals.
Experience
When lease negotiations are moving quickly, it's important that your negotiator be able to keep up. There's nothing wrong with your negotiator including junior members as a part of his support team, but you need a negotiator that won't be surprised by anything that the other side brings up and you need someone that can spot when they're trying to slip something in.
A Calm Demeanor
Lease negotiations can get heated. While it can be a good thing for your negotiator to match the tone of the moment, his ability to successfully make a deal for you rests on his ability to separate himself from the situation. After all, negotiation isn't necessarily about beating the other party. It's about finding a deal structure that works for you.
Options
A benefit of having a negotiator that is tied to you and not the landlord is he can show you additional spaces. That way, you can go into lease negotiations knowing that you have backup spaces. These options allow him to negotiate harder on your behalf, since he knows that he can always go to the fall back location.
Many of the attributes that lease negotiators use to attract clients aren't what really matter at the end of the day. At the table in lease negotiations, no one will care what firm he's from or how he binds his presentations. The broker with the best experience, knowledge and negotiating skill is the one that will ultimately prevail.
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