Mastering Lease Negotiations: Tips for Achieving Favorable Terms

Mastering Lease Negotiations: Tips for Achieving Favorable Terms

When you hear "negotiation," you might envision a movie scene where the silver-tongued executive talks his way into the ultimate deal that no one else thought possible. In the real work, lease negotiations are less glamorous. However, almost anyone can do it, if they know the right steps to take.

This article covers some tips for landlords wanting to achieve the most favorable terms possible on their commercial lease. Keep reading to learn how to get the most out of your investment while retaining tenants.

Start Early

One of the easiest things you can do in negotiating leases is to start the conversation early. You might assume that this gives tenants more time to find alternatives (especially if rent is going up). But it also allows you ample time to work out the details of a lease agreement.

This also gives you more time to listen to a tenant's concerns and make improvements (if necessary). Most importantly, it alleviates the stress of having to finalize the lease during a very small window.


In general, communicating with your tenants in a professional manner is paramount. Never become aggressive or confrontational, and express your thoughts in a clear, respectful manner. Likewise, be quick to listen to any concerns your tenant might have.

Also, to ensure the best outcome for rental property lease negotiations, put everything in writing. This brings clarity for both parties and documents agreed-upon terms for future reference.

Research the Market and Know Your Assets (And Deficits)

It can be difficult to ensure you are comparing apples to apples in commercial real estate. Knowing your market value can be complex, but determining this is an essential step in the negotiation process.

Square footage is of course a major metric by which to gauge a property's value, but there are others as well. These include location and the aesthetics of the space. Know what tenants value in your commercial property and price it accordingly.

The same goes for any drawbacks associated with your unit. Be realistic about anything that can be seen as a weakness and make changes, if feasible.

Hire a Professional

If negotiating is not your thing, there is a foolproof way to do it successfully: turn the responsibility over to a pro. Reputable property management companies will have their finger on the pulse of real estate trends. They also will understand the value of your property relative to the market.

Managers understand the art of negotiation and will also be equipped to know when it is appropriate to give in to tenant demands and when you should look for a new renter. It will give you the peace of mind that you are getting the most out of your investment property.

Learn More About Lease Negotiations in NYC

Now that you know how to get the most favorable terms out of lease negotiations, you can move forward. Remember that hiring a professional can be one of the easiest and best ways to get the most out of your real estate asset.

PMI Paramount is a full-service property management company. In addition to handling lease negotiations, we offer marketing, tenant screening, rent collection, grounds maintenance, and many other services. Reach out to us to schedule a free consultation today.