by: Peter D. Morris CRX, SCLS, SCSM, SCMD
Greenstead Consulting Group
Specialists in Commercial Real Estate Training and Consulting
Many business owners start at this space viewing step foregoing all six steps that comes before it. I hope you now see the wisdom and reasons for conducting those other steps first.
The keys in this step are:
1. Be very specific about the space and what the landlord or their agent says about the space. Take a lot of notes, pictures and measurements.
2. As in all negotiations remain emotionally neutral about the space particularly in front of the landlord and their agent. Many times the rent increased as soon as the potential tenant expressed their desire for the space during the site visit. Along the same lines never commit to a space during a viewing or in the time immediately following a viewing. You will need time to digest the information you receive.
3. Be fair about the shortcomings of the space. Nitpicking about every aspect of the space sends the wrong signal about how the landlord will perceive you during the negotiation and throughout the term. Remember that this is typically when the landlord is doing their analysis on you too. By all means note real issues about the space relative to your established criteria. If the landlord indicates they will correct something, make a note, as it will become a negotiating point. If, on inspection, you quickly determine that the space is really not suitable for your business, be honest and open with the landlord or their agent that you won’t consider the space for your immediate needs. This allows them to consider other potential tenants.
4. Tell the landlord about your selection process, that you are viewing several locations, your timelines and general expectations for the space. You may find that the landlord has alternative space available or coming available that is not advertised yet. Arrange to see that space too.
5. Ask lots of questions. The questions may come from your research on the landlord, the building, or the area. Other questions should come from your criteria list including “asking” price; other costs; incentives; landlord’s work; lease term; options; transfer of any in-place fixtures; furnishing and equipment, etc. Two quick subpoints. When inquiring about rent ask “What is the Asking Price?” rather than “What is the Rent?” There are psychological reasons for this that will help in the negotiation process that we teach our clients. And finally,
6. Always view and start negotiating on several locations at the same time. Let the landlord or their leasing agent know you are looking at other location too and highlights of the pluses and minus of the other locations. This shows the landlord you are serious and have done your homework. However, don’t provide details of where the other location is, such as the building name or address. To do so is both unfair to the other property owner and to your future negotiations because the landlord may know the other property and/or its owner.
Once you have viewed several spaces of interest, narrow the selection to the top two or three and start negotiating on them at the same time. In the next post we will briefly cover the negotiation process.