Get The Best Negotiation Coverage in Industrial Property Leasing

When you are in the middle of a lease negotiation, it pays to track your progress and write things down.  That will help you find the solutions to any impasses that may exist between the landlord and the tenant.  In simple terms, if you write down the key factors of the negotiation, you can usually see a solution in one or more of the elements of the agreement.

If you have a number of lease negotiations underway at the same time, the notes and writing process will help you stay on top of actions and communications.

Leasing Factors Today

The main factors of any lease negotiation are usually:

  • Access to the premises
  • Rent start
  • Rental level (compared to market rent)
  • Incentives by type and amount
  • Permitted use
  • Documentation terms and conditions
  • Landlord works
  • Tenant fitout approvals
  • Guarantees or bonds
  • Deposit monies
  • Outgoings recoveries

Most industrial lease negotiations stall on one or more of these issues.  That is where you as the real estate agent can bring in the right professional processes and negotiation skills to move things forward.  Take charge of the deal every step of the way.

To handle a lease negotiation effectively, get the offer in writing from the tenant at the very start together with the rental deposit as a display of tenant commitment.  You then have something that is genuine to work with, and put to the landlord.  Every offer should be presented personally to the landlord; avoid the convenience or remote solutions of email or telephone wherever possible.  Top agents don’t negotiate across the telephone unless it is the only way to do things given the location of the parties.

Getting the Offer

The lease offer should cover all of the big issues that are critical to lease establishment.  A ‘heads of agreement’ will do that and will get the parties talking.  When the parties agree to the terms of a ‘heads of agreement’ the final lease itself will likely create some debate, but at least you have all the main issues covered.

Most experienced landlords will have their property solicitor or attorney prepare the lease in final form; that is a wise strategy given that the document can be matched to the property and the parties in negotiation.  A quality property requires a quality lease.

Access to Premises

One of the more common requests that you will get in and through a lease negotiation, is that of access to the premises.  When the tenant has acceptance from the landlord of the basic terms and conditions for the lease, they are likely to ask for premises access in preparation for occupancy.  They will ask for the key.

Access should not be given until all formal lease documents are signed, monies are paid, and guarantees are supplied.  Many a tenant has changed the rules and stalled negotiations on the lease when they get into the premises before all documentation is fully signed by all parties and in place.  The only leverage that a landlord has in getting the tenant to complete the lease negotiation is retention of both the access and keys to the premises.




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