Choyce Tips: Aug. 2010: Your Landlord's Favorite Tenant

(For access to full html version, please click here.) Even in today’s soft market, landlords only roll out the red carpet for special tenants.  Just as tenants rank the attributes of various buildings, landlords rank the attributes of various tenants.  So how do you become your landlord’s favorite tenant, and in doing so, secure the V.I.P. treatment you deserve? Here are a few pointers.

Credit, Credit, Credit

Lots of time and money is expended in finding the right tenants and getting them to sign on the dotted line. Problems collecting the rent, or even the need to evict a tenant, can become a landlord’s worst nightmare. Strong credit will trump any other attribute of equal-sized tenants. And even a weak company paying its bills may seem one setback away from default to some landlords. Thus, less creditworthy tenants should move fast when given an opportunity to lock up a deal.

Compatibility

Landlords must maintain their buildings’ image.  At the very least, they must consider how a particular tenant mix impacts their buildings’ marketability.  Prospective tenants’ employee density (e.g., occupants per square foot), working hours and the nature of their business can impact parking, lobby/smoking areas, security and building visitors. These, in turn, can affect the ability to attract or retain other occupants.

Long Term

Landlords like stable tenants. If you are willing to commit to a long-term lease, you are making your landlord’s life easier.  But term length represents only one indication of stability in addition to credit history, company size and brand reputation. Pepsi secures more aggressive concessions than a start-up company.

Ease of Entry

Landlords abhor vacant spaces. Every month without a tenant loses money. So when you sign a contract to move in six months later than a typical tenant, your new landlord, in effect, is sacrificing potential income to guarantee a tenant in the future. Landlords expect to take some time to negotiate a deal, develop plans and make alterations. But curtailing a three-to-five month process, or more for a large deal, means found money for the landlord. 

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Ultimately, understanding these considerations goes beyond pleasing your landlord and saves your company money by enabling key concessions during lease negotiations. Thus, understanding how your landlord sees you is vital to understanding what he’s willing to do for you.