In the post-Covid 19 world every business has been affected one way or the other. According to some estimates the average occupier has slashed the office footprint by as much as 25% by transferring some of the staff from traditional office work to remote work.
So how do you negotiate the sweet spot with your landlord and seek the value on the table rather than bargain over the price? There are a number of good old ways and hacks to negotiate but in this article we will focus on a few that are most relevant in today's state of the market based on a win-win approach.
Most landlords are looking for long-term relationships, hence they qualify potential tenants and how much they could afford to pay. In other words, they are looking for the best possible deal from the best possible tenant. In this market the best possible tenants are also those who are looking for bigger discounts and more special privileges.
If rent is the proverbial orange juice and the core of the orange is the so-called lease term, professional landlords are like professional athletes they are not always after quick returns and gains but trying to save energy and resources by not wasting the core and avoiding at all costs any gaps between the old and the new tenant. This is your first leverage. Understanding what's important for the other party is the key to reaching sweet spot deals rather than splitting the orange in the middle.
With more and more space being made available every landlord will eventually feel pressure and will have to be more flexible and adaptive to the new market trends and changes. The majority of businesses got used to working from home with some 25% of the staff never coming back to the office. This is now a fact and we all have to face it. If your landlord was reluctant to give you any rent abatement during the quarantine time, they did not gain any loyalty and favours from the existing tenants in the long term. The leases will eventually come to an end, the tenants will most certainly be looking somewhere else for new lease acquisitions and new setups.
And the final piece of advice and perhaps leverage is to convince your landlord to show flexibility now by moving you to a new space in the building with less square meters/less rent helping you to reduce the costs and letting the landlord help find a new tenant for your old space by sharing some of the costs and motivation. If you and your landlord are on the same page, you are more likely to find a faster replacement for the available space and reward your landlord with more years of loyalty and good publicity. And when the good times come (eventually they will), such landlords will be rewarded with more cherries on top of the cream than those who chose to squeeze all the juice and dump the core in the first place.
If you're looking to reduce your occupancy costs or if you have any other needs, please feel free to call us at +74951981147 for advice or possible solutions.