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In a commercial real estate negotiation (or any other negotiation), both parties have a hidden agenda. The hidden agenda consists of a party’s needs and break-even points. These are camouflaged with a party’s wants. Uncovering the other party’s hidden agenda is, therefore, the key to success in a negotiation.
Developing an appreciation for the other party’s needs and wants is perhaps the most important ingredient to successful negotiating. To discover the other party’s position, you must ask probing questions and listen to the answers.
Asking questions is easy. Listening is not. Active listening requires concentration. When you lose concentration during negotiations, you may hear a statement, yet completely miss its subtle meaning and lose the opportunity to uncover the hidden agenda.
Figuring out what you really need or want is relatively easy, but it’s another matter trying out-guess the other party. Enter the negotiation with a strategy to trade off your wants for your needs, sacrificing your less important needs or wants in exchange for your more important ones. A skilled negotiator will accept one of the other party’s points in exchange for gaining his acceptance of one of his own, and still wind up with the deal he wanted initially. A tenant may need extra parking spaces above the landlord’s standard parking ratio, but only want a designated parking area. The tenant will likely give up the designated area in order to get the extra spaces it needs.
Be sure to leave yourself some room to make concessions in the spirit of compromise. If you leave too much room, you may discourage or offend the other party. If you don’t allow enough room, you could leave money on the table. Your success at posturing will dictate your success in making the deal.
A commercial real estate broker with technical skills and experience in the local market is an invaluable resource for firms in a commercial real estate negotiation. An experienced commercial real estate broker should already have a relationship with the counterparty, and will have an easier time reading the stated and unstated meanings in the counterparty’s verbal and body language. The commercial real estate broker will also be able to devote more concentration to the process than a busy senior level executive.
For more real estate negotiation tips, read our article Real Estate Negotiation tips Part I.
At Golden Group Real Estate, we specialize in tenant representation real estate services for office space users in the Chicago area, helping local business owners find office space and negotiate lease and purchase agreements. We never represent landlords, so we are prepared to negotiate aggressively on behalf of our tenant clients.
For more on Golden Group Real Estate, read about our real estate services. Let us know if we can help you find office space for rent or buildings for sale. Call us at (630) 805-2463, email us at email@example.com, or enter your office space search criteria below.
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