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Negotiating commercial leases is that the lowest rent doesn’t always make it the best deal. Every business has different priorities.
For some, keeping monthly rent as low as possible is the right strategy. For others, it makes more sense to negotiate concessions that improve cash flow during the first year, when expenses are often the highest.
I’ve worked with commercial tenants who were willing to pay a little more in rent because it gave them several months of free rent upfront. Others benefited more from tenant improvement allowances that helped offset the cost of building out the space. Sometimes those concessions create more value than simply negotiating a lower asking rent.
The structure of the lease matters just as much. A triple net lease, a modified gross lease, a percentage lease, or a hybrid structure can all affect your overall occupancy costs in very different ways.
That’s why it’s important to look beyond the rent itself and understand what you’ll actually be paying over the life of the lease.
When I’m representing a tenant, the conversation always starts with one question. “What are you trying to accomplish?”
If the goal is preserving cash during the first year, the negotiation should reflect that. If the goal is creating predictable long-term occupancy costs, that’s a different strategy.
The strongest lease negotiations aren’t about winning one point but about putting together a deal that supports the business long after the lease is signed.
What questions does this bring up for you? Leave them in the comments!
xoxo,
Cyn
