With the dramatic crash of the commercial real estate market, there may never be a better time to lease office space. Having said that, before you go into negotiate (or renegotiate) your lease, make sure you can hit the "pressure" points that will generate your greatest return.
According to a recent article published on globest.com, rather than simply asking for the basics (like tenant improvement dollars, or lower lease rates), tenants should be negotiating for things like property tax reductions.
“Tenants should negotiate lease terms that require landlords to seek property tax reductions and, if successful, to pass through savings, particularly in the case of anchor or sole tenants... Additionally, while many gross leases contain provisions whereby the tenant is responsible for increases over base year expenses, tenants should seek the benefit of decreases as well. Owners of more than 1,000 commercial properties in San Francisco have asked the Office of the Assessor-Recorder to have their property taxes reduced this year, based on lower building values.”
This article went onto highlight some additional key points (lease rates have fallen to 2006 levels, a large number of subleases are tied to a number of leases that expire within the next 12 months).
My biggest take away from this article is that negotiating a "good" lease at this time is not difficult to do given the low hanging bargains available. However, the time is right to negotiate a spectacular lease. To do this, one needs to bring in a professional Commercial Broker (preferably a dedicated tenant representative), someone who has a deep understanding of the market, and can apply the necessary pressure to grind out the spectacular deal.
To read the complete article click HERE.
According to a recent article published on globest.com, rather than simply asking for the basics (like tenant improvement dollars, or lower lease rates), tenants should be negotiating for things like property tax reductions.
“Tenants should negotiate lease terms that require landlords to seek property tax reductions and, if successful, to pass through savings, particularly in the case of anchor or sole tenants... Additionally, while many gross leases contain provisions whereby the tenant is responsible for increases over base year expenses, tenants should seek the benefit of decreases as well. Owners of more than 1,000 commercial properties in San Francisco have asked the Office of the Assessor-Recorder to have their property taxes reduced this year, based on lower building values.”
This article went onto highlight some additional key points (lease rates have fallen to 2006 levels, a large number of subleases are tied to a number of leases that expire within the next 12 months).
My biggest take away from this article is that negotiating a "good" lease at this time is not difficult to do given the low hanging bargains available. However, the time is right to negotiate a spectacular lease. To do this, one needs to bring in a professional Commercial Broker (preferably a dedicated tenant representative), someone who has a deep understanding of the market, and can apply the necessary pressure to grind out the spectacular deal.
To read the complete article click HERE.
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