The yearly turn over of residential rentals can be a grind at times. The beauty of commercial real estate are the long term leases. However they take time and lengthy negotiations.
In this video, I wrap up negotiations on a seven year lease renewal. You will learn a couple of my key takeaways.
1.) The longer term the lease and the larger the space usually means more negotiations, and therefore more back and forth.
2.) Start early when you have a large space coming up for renewal. Don't just assume that they will stay. You don't want to get surprised.
3.) Set aside TI (Tenant Improvement) dollars in your property budget. When you are negotiating larger lease deals, there is bound to be some build out or improvement dollars involved.
4.) Be patient. Since negotiating lease renewals can take time. You need not get frustrated if the target gets moved on you a few times. This particular tenant, changed their plans on how much space they were keeping and how much they were giving back a few times until they finalized it. In the end, they made the decision to give back space that will be extremely easy to rent and for a high dollar per square foot!
Matthew Drouin is a full time real estate investor and REALTOR with 12 years of acquisition, disposition, development and management experience in Rochester, NY.