Talk to Your Landlord 6-9 Months in Advance

All landlords expect to make deals well in advance of actual lease expiration dates or new lease commencement dates.  So we use this time to your advantage, by beginning your negotiation early.  This does two things;  1. it sets the stage for your ability to move in the eyes of your landlord, and 2. it allows you ample time to really consider other options, options you can potentially play off your landlord to generate even greater leverage.

Ask for a Written Lease Renewal Proposal

The old adage is “He who speaks first loses”.  Well, that is very true in the office leasing world.  Your landlord should be able to provide a written lease renewal proposal the same day they are asked or the next day at the very latest.  You may be pleasantly surprised how aggressive your landlord gets in an initial proposal to keep you out of the market.  We use a carefully crafted form called a Request For Proposal (RFP) to start all negotiations.  This document sets forth the basic deal points you are looking for in your renewal and the parameters by which you would consider renewing.  Then your landlord can respond with the economic deal points they are willing to offer based upon your unique needs.  Having everything in writing also keeps your landlord honest when its time to draft the lease.

Let Them Know You are Reviewing the Market

Many brokers will shy away from this approach because they want to endear themselves to you by showing you all sorts of options before they speak to your landlord.  We couldn’t disagree more.  We’ve seen from our years on the Landlord side that those tenants who are in constant dialogue with the landlord regarding their review of the market always get the best deal.  They wear the landlord down over time, giving the landlord multiple opportunities to compel the tenant to renew.  The alternative of waiting until you’ve lined up other options and hitting the landlord between the eyes with an initial lowball offer is often so shocking that it makes the landlord turn up their nose and sometimes they won’t even respond to your proposal.  You would be much better served to create a congenial negotiation where the landlord wants to keep you in the building.  This approach is much better than creating an adversarial position where the landlord only keeps you because they have to.  So, be in communication.

Everything is Not Perfect

If you tell the Landlord that the space is great and/or the building is great, or give them other reasons why this is the perfect office for you, you’ve just eradicated your negotiating leverage.  Instead highlight the challenges you have in the space, or the building, or even your issues with the management team (this should be done very politely).  The bottom line is this; Your Leasing Situation is Not Perfect.  We know, because we’ve never seen a perfect scenario.  There is always wasted space in the office, or the building is not ideally located, or the tenant down the hall is noisy, or you’re tired of the restaurant selection in the area, or whatever.  Just put a little fear of doubt in the landlord.

Let the Landlord Spend a Little Money on You

If you are considering renovating your space, by all means request that the landlord set up a meeting with their space planner.  The landlord will generally gladly comply with your request and will pick up the cost of the space plan and space planner’s time (don’t ever let the landlord talk you into reimbursing them if you don’t renew).  Once the landlord has spent some money, they will be more attached to the idea of renewing your lease.  No landlord wants to lose a deal after spending money on that deal and have to deduct space planning costs from their marketing budget.   They would much rater put those costs in with the tenant improvement budget and reflect the costs as a positive measure to encourage their successful renewal of your lease.