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8 Reasons Why It's Important to Bring a Broker to Your Commercial Lease Renewal Negotiations
"A lease renewal transaction isn't any different from the initial transaction,"
"Ensure that you're getting the best deal possible in your lease renewal by using an agent," says Bielsky. Mr. Bielsky is a known expert on lease renewal negotiations, often building money-saving devices into clients' leases. He offers eight reasons why it's important to consult a broker when renewing your commercial lease.
1. Your requirements may have changed.
If you need more or less room, or different amenities or resources, these details can be changed at the lease renewal, but the process isidentical to the initial signing. It's in both of your interests for the tenant to remain in the space, but the particulars can be adjusted.
2. You need an impartial third-party.
If you're in charge of handling the lease for a large company, it's especially in your interest to use a broker. Large companies typically demand the absolute best deal (when a change of 1% could mean millions). You can't be sure you have the best lease unless you consult a third-party professional.
3. Brokers know what your space is worth.
Since you signed the initial lease, it's quite possible that the market has changed, and the value of your space should be adjusted. "Real estate is a volatile business and prices change all the time," says Bielsky. A broker will understand the real estate climate. He'll help you compare similar spaces in the area to make sure you're getting the best deal.
4. Lease negotiations take time.
Some deals can take up to six months to finalize. If you're running a business, you may not have the time to go back and forth with your landlord. You should focus on being successful at whatever you do, and let your agent argue on your behalf.
5. A broker isn't emotional.
Surely you aren't a basket-case, but when you're negotiating your renewal, you may be under a bit of stress. If this is where you do business or the only place you have to live, you'll feel pressured to finish the deal quickly to unburden yourself, even if that means accepting terms that aren't in your best interest. A broker doesn't feel that stress. He won't leave your homeless or without a place to operate, but he doesn't bring sentimentality to the negotiation table.
6. Landlords take agents seriously.
It's in the landlord's best interest to keep you as a tenant. A broker means you're serious about negotiating and expect to receive a fair deal. The landlord knows that if renewal negotiations fail, you already have an agent who knows your needs and is ready to find you a new space. In fact, that agent might already be looking around for you…
7. The agent can look elsewhere for you.
It can't hurt to look at other places, and if the financial details are right, even move to them. Further, it's good to hint to your current landlord know that moving is an option for you. He'll be more inclined to bend to your requests.
8. A broker is a skilled negotiator.
The broker will ask you all kinds of questions about your current situation. Is the landlord doing anything he promised he wouldn't? Will an outdoor escalator (landlords are notorious for neglecting to mention them) raise your rent? There are between 15 and 25 terms within a typical lease that need to be reviewed and renegotiated upon a renewal. The broker will quiz you for anything that might assist in getting you a better deal. He'll ask you questions you would have never considered; questions that are specific to your situation.
Note to the media: Robert Bielsky, Founder and Chairman of mCr, is extremely mediagenic and can offer the best tips and advice regardingNew York Real Estate (http://www.mcrny.com/
About Chairman Robert Bielsky
Mr. Bielsky holds a national reputation as a leader in the commercial real estate industry. His market expertise, creative deal making skills, and keen knowledge of the art of negotiation have maintained his position at the forefront of the industry.
As the founder and Chairman of Manhattan Commercial Realty he leads one of the most powerful negotiating teams in NYC. With his leadership mCr has maintained a strict dedication to tenant representation, and successfully negotiated over $1 billion in real estate transactions since its inception in 1982.