Effective Negotiation Techniques When Renewing a Lease

Last Updated February 20, 2017

Renewing an office lease is a tenuous process and one that often has the tenant at a disadvantage. Remember, your landlord is a seasoned player— he or she negotiates regularly, whereas you negotiate once every 3 to 10 years. Moreover, a landlord can be comforted by the knowledge that tenants renew 7 times out of 10 and that you may well be overburdened by the cost and trouble of relocating. Leveraging the best negotiation techniques can give you an advantage in an otherwise unbalanced situation.

  1. Make the Landlord show his hand first during negotiations with the first offer.
  2. Do not accept the first offer. Generally speaking, you should ask for more than you want and make sure that your offer counterbalances the landlord’s first (likely extreme) offer.
  3. Don’t delay. Give you and your team time to analyze the market and make sure that you have some time if a bad deal demands that you find another location. Make sure that the landlord is aware that you’ve given yourself this time buffer.
  4. Even if you are determined to stay in your current location, you should still introduce some competition into your negotiations. Make it clear to the landlord that you are entertaining other possibilities.
  5. Don’t show any emotions, and try to keep your demeanor as neutral as possible.
  6. Bring a tenant representative onto your team. A professional tenant representation broker is as accustomed to negotiations as your landlord and can be an indispensable asset.
  7. Bring a real estate lawyer into your team, as well. Ideally, your broker and attorney should work together to finesse both business terms and legal clauses.
  8. Never think that because you have been a good and dedicated tenant for several years that this will garner you a good deal. Nine times out of ten it won’t.
  9. Limit your team to a few, key personnel. This reduces the risk of any critical information leaking during negotiations.
  10. If you have a tenant representative on your team, let him or her do the talking. Direct contact on your part can undermine your representative’s position and create setbacks to negotiation.

Coy Davidson

Senior Vice President at Colliers International, based in Houston, Texas.