We Are Whelchel & Carlton, LLP

How to negotiate a favorable retail lease agreement

On Behalf of | Sep 10, 2023 | Commercial Real Estate

Many Georgia retailers have a lot of options when choosing a location. More choices is usually a good thing, but it can make it difficult to actually focus on what matters and make clear decisions. Prospective commercial tenants should temper their excitement with a few basic best practices to get the most out of their lease agreement.

Give yourself options

Many people make the mistake of “settling” on a site that they like, especially if it’s one that seems to fit. While this is great if it works out, you should always continue the search and seek out at least a few different possibilities. Prospective tenants should also establish their list of must-haves and maximum budget goals beforehand so they don’t have to hash out these lines on the spot during negotiations.

Aim for smaller concessions

Depending on the contract, there are often negotiating options that can provide a significant advantage without compromising the established rental costs. Diverting responsibility for certain types of upkeep, like HVAC or lawn care, can make a big difference in overall value. You should try to get the property owner to acknowledge their responsibilities as clearly and broadly as possible to avoid unpleasant surprises down the road.

Be professional about it

Even following a few of these negotiating tips can yield serious long-term benefits for the duration of your lease. Tenants should push for favorable terms during their real estate negotiations, because their bargaining power goes down significantly after it’s done.

Hiring an agent is the best way to be professional about lease negotiations, but it doesn’t mean you can’t be smart about it too. You should always check the landlord’s claims and description of the space before proceeding with negotiations. This is particularly important if the layout or accessibility for certain appliances or equipment is essential for planned business operations.