Lease Negotiation

[James2011]

Originally Posted by ldm

Andrewmd: Based on my reading of the various posts, and your continured like kind questions, I would strongly recommend you hire a professional to assist you in your efforts to obtain the best rental rate available from your LLD. This recommendation is made with all due respect to you as a fellow business owner with the simple belief that the right professional will net you a better deal than if you go it alone. Les

who is the right professioanal? attorney? or real estate broker? or else?

[dbrown2508]

What is it that convinces him?

If he is convinced that without a significant rent reduction he will have a vacant store in a few months time. Or if he cannot afford to risk calling your bluff.

That is either you doing the convincing or (my recommendation) a professional.

Doug

[ldm]

Originally Posted by andrewmd

who is the right professioanal? attorney? or real estate broker? or else?

I would use a knowledgable commercial real estate broker with a leasing and property management background who is very familiar with your area. With any luck, you will find one that knows a little about your LLD or their manager...this can be helpful. Les

[dbrown2508]

I'm using a commercial resl estate broker who specializes in retail.

[James2011]

one last question, I need your opinion about this:

someone told me that

1) for lease renewals: if P&L shows loss, then LL can take disadvatage of this not to give new lease, iow, out of biz

2) for rent reduction: if P&L shows porfit, then LL tend not to allow any rent reduction.

If this is true, I am in a dlillema, that I will have to pursue both.

[Howard]

Originally Posted by andrewmd

one last question, I need your opinion about this:

someone told me that

1) for lease renewals: if P&L shows loss, then LL can take disadvatage of this not to give new lease, iow, out of biz

2) for rent reduction: if P&L shows porfit, then LL tend not to allow any rent reduction.

If this is true, I am in a dlillema, that I will have to pursue both.

Yes, that is why you should not offer P&L statement. What you want to convey is that based on your detailed market analysis his rent is out of line with norms for the area and that you are willing to pay a fair market rent, but not more than that.

[James2011]

Originally Posted by Howard

Yes, that is why you should not offer P&L statement. What you want to convey is that based on your detailed market analysis his rent is out of line with norms for the area and that you are willing to pay a fair market rent, but not more than that.

Thanks Howard,
What should I do except hiring expert?
Already LL asked me to show him P&L, should I show him or not show him at this moment?
Thanks,
--Andrew

[Howard]

Originally Posted by andrewmd

Thanks Howard,
What should I do except hiring expert?
Already LL asked me to show him P&L, should I show him or not show him at this moment?
Thanks,
--Andrew

Well now that he is asking you are sort of stuck between a rock and a hard place. Further you have to decide if you want to show him real numbers or just make up numbers. If your numbers look to good he may say you don't need a decrease and if they are bad he may say he does not want you there and does not want to renew your lease at all. At this point I think you really need to get a property manager or realestate agent working on your side for advice based on your area. Personally I would not be showing him P&L stuff at all unless he was willing to make the rental payment a percentage of gross -- which is done in some areas. That way if you do well he does well and vis-a-vera.

[nycwash]

Originally Posted by Howard

You might want to consider hiring a professional. Their are people at some realestate companies that specialize in lease negotiations. Remember the landlord that owns many malls negotiates leases perhaps on a weekly or at least monthly basis, you do it maybe twice in a lifetime. Who do you think is better at this? He looks at it as a business decision, you look at it personally. Pay an expert to do this for you, you will come out ahead.

Howard,
Did you ever use leasing expert? How do they charge for their services?

[Howard]

Typically they charge a percentage of what they save you. When I bought mine I consulted with two commercial real estate agents in town. They do this sort of work, but had a conflict of interest as they did a lot of work for the organization that owned the strip mall. Both however, were willing to give me lots of "suggestions" on what point I should go after and what they would expect to pay in that area. It was well worth the effort.