Use Research to Inform Your Commerce Real Estate Negotiation Strategy

The best way to establish your negotiating posture is to do your research on the local market.  This step will do more to help you determine the priority of your bargaining points than you can imagine, yet it is often overlooked.

Before you begin your negotiation, you should know the following about your market:

  • base rental rates
  • the frequency and magnitude of rent increases
  • the length of leases being signed
  • the concessions being offered by landlords
  • the terms of renegotiations
  • current and projected vacancy rates

In addition, it is wise to find out who is moving in and who is moving out.  Who is building?  How long has the market been in its present condition, and what is the near-term outlook (overall and for the specific neighborhood).  These facts will help tenants gauge the reasonableness of their demands when setting their negotiation objectives.

A tenant should enter a negotiation knowing the current terms offered by its landlord’s competitors and the current terms offered by its landlord to other tenants.  Successful negotiations require anticipation of the other party’s needs and discovering the other party’s hidden agenda.  Effective research goes a long way toward enabling you to determine what might be important to the other party.

Commercial real estate brokers are excellent sources of research information.  Tenants facing a potential negotiation should retain an experienced commercial real estate broker who specializes in their market.  A qualified broker will provide market intelligence to inform the negotiation strategy.  For more on the benefits of tenant representation, click here.  For more information about planning an office relocation, click here or contact me at or (630) 805-2463.


Troy Golden

May 24, 2019

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