Commercial leases are often lengthier than residential ones, and market conditions and other variables often change from the time you sign the lease to the time it comes up for renewal. Before you decide to renew your commercial lease as-is, you may want to reexamine your situation and see if you might be able to renegotiate more favorable terms.
It often pays to show your landlord that you are well aware of the current market and other options you may have. Demonstrating knowledge of the market and your specific industry may give you more bargaining power in the long run. So, when negotiating a commercial lease renewal, consider making the following moves.
Start the conversation early
It may benefit you to approach your landlord about any potential changes you want to make to your lease long before the end of your lease term. This gives your landlord time to weigh the pros and cons of your proposal. It also gives you time to figure something else out if you are unable to come to an agreement about the lease renewal.
Understand what the landlord stands to gain or lose
In many situations, it benefits a commercial landlord to keep a paying tenant in place. If you were to vacate your commercial space, your landlord must spend time finding someone else to take over. He or she may need to make pricy accommodations for a new tenant. He or she may also have the space sit vacant for a period, leading to financial losses.
The more you understand about your options and how much money your landlord stands to gain or lose by having you renew your lease, the better the chances of you being able to negotiate new terms that fit your needs.
