Tips for Negotiating Your Commercial Lease, MASSAGE Magazine

Whether you are looking to open your first massage therapy clinic or preparing to renew a commercial lease, you must prepare before meeting with your landlord. By proceeding cautiously—or, better yet, hiring a professional to advocate for you—you can better guarantee far more reasonable terms.

Remember, you are typically at a disadvantage when negotiating a lease, as the landlord (and his agent) are often more knowledgeable and experienced in the area of commercial leasing than the average tenant. Their job is to sell you on leasing the largest amount of space at the highest possible rental rate. Before you jump in blindly, keep the following leasing tips in mind:

1. Talk to other tenants. If you are looking to relocate or open a new clinic, remember that some of the best inside information available is from tenants already in a building. Introduce yourself as a prospective tenant and ask for an honest opinion of the landlord. Inquire about the level of property maintenance, their thoughts on the rental rate being paid, their intentions to stay on another term and so on. What you learn here may surprise you; use it wisely in your negotiations.

2. Is the asking rent too high? As a former landlord’s leasing agent, I frequently asked tenants for rents much higher than we expected to achieve, because occasionally some entrepreneur would naively pay it. Know and understand rental rates are set by commercial landlords to achieve a reasonable profit after paying their mortgages. Many tenants (massage and otherwise) believe a landlord wouldn’t charge more rent than the tenant could afford to pay. Regrettably, many tenants learn the opposite is true—the hard way.

3. Lease renewal allowances. Massage clinic tenants don’t often think they can negotiate for a tenant allowance on their renewal term; this is not true. If your landlord is giving allowances to tenants moving in, then why can’t you get an allowance, too? Even if your clinic space only needs cosmetic upgrades, such as new carpeting or a fresh coat of paint, it can be negotiated as part of your renewal deal. After all, your tenancy is proven, plus there is less risk for the landlord to sink cash into your renewal than take a chance on a new tenant who may not work out.

4. Go slow for a better deal. Massage tenants often rush a lease deal and leave many valuable incentives or inducements on the bargaining table. If you have time to consider a deal thoroughly, I recommend you take it. Often, tenants can receive some free rent, more tenant allowance and even a lower rental rate just by refusing to sign on the dotted line so quickly. If the landlord or realtor is anxious to close the deal, you can use stalling tactics to better your position. Massage therapy tenants who invariably regret what they agreed to initially will usually explain that the whole process happened so quickly, they hardly realized what was consented upon.

5. Ask for more than you need. Whether negotiating for free rent, tenant allowance or any other term, always ask (negotiate) for more than what you actually require. If you need six months of free rent, push for nine months of free rent instead. You should almost never start negotiating at the level you are prepared to accept. By asking for more than you expect to receive, you position yourself to strategically “give and take” depending on the importance to you of certain terms.

6. Renewing with no deposit. If your clinic lease agreement requires you to make a deposit for the initial lease term, it is unacceptable for that deposit to continue indefinitely. Ask yourself: Are you a security risk? Have your rental payments been promptly made? If so, resist further security deposits and ensure that you state this amendment in the renewal agreement. Otherwise, your deposit, which was to apply to your last month of tenancy, needs to be replaced for the renewal term.

Dale Willerton is The Lease Coach and a senior lease consultant who works exclusively for tenants. Willerton is a professional speaker and author of Negotiate Your Commercial Lease or Renewal. Do you have a leasing question? Need help with your new lease or renewal? Call Willerton at (800) 738-9202, e-mail DaleWillerton@TheLeaseCoach.com or visit www.TheLeaseCoach.com. For a free CD, titled Leasing Do’s & Don’ts for Massage Clinic Tenants, e-mail Willerton.

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