It is always prudent to understand the landlord’s position, concerns and objectives when entering into a lease negotiation. This understanding often results in effective negotiation tactics and ultimately translates into more leverage for the tenant.
The below points represent the top 12 common mistakes landlords make with their properties and leasing activity;
1. Signing leases without a strategic plan. A “big picture” or whole building approach to leasing is critical to achieve good rents and quality tenants.
2. Leasing the best space first. This can greatly devalue the rest of the building’s available space.
3. Failing to ensure each tenant’s lease terms. This supports investment objectives for asset disposition.
4. Faulty termination clauses, allowing for easy “outs” and without penalty fees.
5. Hiring a broker without the right specialization.
6. Failing to thoroughly investigate the tenant’s financial position.
7. Allocating capital incorrectly, and spending money on items that will not benefit the tenant/help lease the building.
8. Choosing incompatible tenants.
9. Pricing the building incorrectly.
10. Failing to evaluate the competition.
11. Forgetting the small stuff, and not paying attention to the details of the building.
12. Lacking a “story”, or not providing any differentiating factor for the building.