Understanding the market, the correct timing and comparable business deal points positions you and your agent to begin the process with a high-level of anticipation for success. However, any preparation will quickly amount to nothing if you do not have a focused negotiation strategy.
Pitfall #3: Failing to create a strong posture
The key to an effective negotiation posture is most clearly found when you have multiple options on the table and are willing to pursue those options.
One of the first questions a landlord will ask its broker is whether the tenant has professional representation. If the answer is no, they will ask if the tenant appears to know the market and is educated on the business points they are seeking. In a renewal situation, they will ask if the tenant is seriously willing to leave. If the landlord and its broker sense any weakness in the posture created by the tenant, they will not offer terms that are truly competitive as compared to other options in the market.
Landlords also see it as weakness if a consultant or out-of-state attorney is handling the negotiation for the tenant because they know there is no local market knowledge present. Landlords come to the same conclusion when tenants attempt to represent themselves.
Also crucial to posture is beginning negotiations at the proper time—ideally one year before the current lease expires. If there is insufficient time to plan and build-out a space, the landlord will assume the tenant’s options are limited, weakening the posture.
Strong posture causes the negotiation to be more favorable than merely bartering with a landlord. Leveraging a local real estate professional’s expertise and then dictating favorable terms to a landlord yields consistently more favorable terms to a tenant than simply asking for a lower price.
Strong posture is not about bluffing or threatening. Having multiple legitimate options and a credible willingness to choose the other property creates an environment where landlords compete to attract or retain quality tenants and ensure they get competitive terms.
Expert representation by a real estate professional is available at no cost to tenants, because their services are paid for by the landlord or seller as part of the listing agreement with the landlord’s agent.
Avoiding these pitfalls will help healthcare tenants achieve more favorable terms for their practice and bottom line.
For more information about how you can maximize your profitability through your next real estate transaction, visit our FAQ page or click the following link to start a conversation with an expert agent representing healthcare providers in your area: Find an Agent