Lease Negotiating Factors, Part 1: A Landlord’s Perspective

The ability to negotiate with a landlord and substantially discount their asking rent depends on a few key factors. Take away from this blog series what is applicable to you and your company in terms of space and other considerations. Our intention is to provide know-how and strategies to implement when making decisions and negotiating your transaction.

Typically, a larger institutional landlords’ highest priority is the long-term performance of their assets: the buildings they own. As such, they tend to hold out for higher numbers even when it means waiting for the market to turn around. Conversely, a smaller landlord, expecting their asset will ensure a comfortable retirement or family income, will prefer the stability of a fully occupied building.

The way in which a tenant potentially fits into the building profile determines a landlord’s motivation to reach a deal. For example, a tenant with good credit and a stable company history, especially one larger than the average occupant, is a desirable candidate. An even better scenario is a tenant who has grown its business over the past five years. Generally, landlords—specifically institutional landlords—want larger tenants committing to a longer-term to minimize risk to the value of their portfolio.