Negotiating a real estate transaction can be difficult, and often leaves one or both parties with less than they wanted. When negotiating a commercial lease for a retail space, office space, etc., keep in mind these five factors to avoid the common mistakes:

1. Leverage

There are a few things that can be used as leverage so businesses can get the best deal possible. These are:

• Time- Procrastinating finding the right space will give the business less time to negotiate the best terms.
• Silence- The less the listing broker or landlord know about the person’s feelings, the better they can negotiate.
• Options- Having a back-up plan and being able to walk away is a powerful tool.

1. Term Over Rate

Rates are definitely important when choosing a space, but the length of the term can have more of a financial impact. Negotiate the term so that it will fit the business’s needs rather than bargaining over percentage points. The wrong lease term can cause the tenant to pay more for a space that isn’t working for them.

1. Nothing is Free

The length of the lease generally affects other factors within it like tenant improvements and concessions. Tenants should not negotiate a longer lease than they want just to get free rent or tenant improvement finances. The landlord will get the money back over the longer term, making it not as free as it initially seems.

1. Legal Review

It is always a good idea to bring in an experienced attorney, such as those at InnovaCounsel, to review any lease agreement before signing. Brokers benefit from the signing of the lease, so bringing in someone looking out for the needs of the tenant will ensure they are being treated fairly and have a full understanding of what they are signing.

1. Exit Protections

It’s always best to plan for the unexpected. An attorney can help to negotiate cancellation clauses in the lease in case something goes wrong.

The attorneys at InnovaCounsel have years of experience dealing with commercial leases, negotiations, and landlord/tenant relationships. Contact them for help negotiating and reviewing any leases before signing.