Advice to Tenants Arbitrage: Finding a Motivated Landlord by Dan Mihalovich
When we’re retained to represent a tenant, we orchestrate a competition among landlords for our client’s business—whether we’re looking to renew or relocate to a new premises.
Historically, many landlords treated their existing tenants as a captive audience—since employee downtime, moving costs and related nuisances often deter a decision to relocate. However, leveraging the renewal discussions and negotiations by using a seasoned real estate professional compels the existing landlord to step up and offer enticements that are at least as sweet as those they offer to new tenants.
So, what is the value of your tenancy in the marketplace, for space comparable to your existing space? Although motivated landlords may be offering huge incentives to move, you must engage them in active and meaningful negotiations with the intent to move.
The result of this competition is a set of well-developed alternatives—including renewal, if appropriate in the end—and proof of your company’s value. At lease signing, tenants who have scoured the marketplace for the compelling opportunities rest more comfortably with their final business decision.
Arbitrage—testing one landlord against another—is the only way to bring out the best of concessions for your negotiations.
