How to educate your landlord

No fixed abode in the virtual world of the cloudThe commercial rental property market in New Zealand continues to be very much a tenant’s market… but there are many landlords who simply don’t get it.

Negotiating myopia
It amazes me in the many negotiations I conduct for clients how many landlords take such a short-term view and, by playing hard ball, lose out on securing long-term tenants.

In today’s over-supplied market it is more important than ever, one would think, for a landlord to build a good and long-term relationship with tenants. But alas, many still don’t get it.

In my experience, the good majority of commercial property landlords in New Zealand have very poor negotiating skills. They are often inflexible and take a narrow view regarding their income and profitability.

Here is some free advice:

  • Do not bow to the assumed power and might of the landlord.
  • Consider the range of possibilities in negotiation.
  • Offer alternatives that can secure a deal that suits the tenant.
  • Make sure those alternatives also meet the needs of the landlord.

75% of these landlords didn’t get it…
Of the four most recent commercial property negotiations I’ve been involved in recently, only one landlord was flexible, prepared to build a relationship with their tenant, and look to the long term.

Prediction:
I predict that come the next rent review, this relationship will last and a rent renewal to benefit both tenant and landlord will be achieved. In the other three cases where the landlord has been inflexible, the tenants will leave to find a better deal.

I believe it is the way of the future that win-win solutions in business will result from thinking about the needs of the other party.

Advantage
The advantage I have negotiating strategies on behalf of tenants is that I can take a totally independent view and offer up win-win proposals that not only benefit my commercial tenant clients, but educate landlords about potential alternative deals and how to win secure long-term tenancies.

I’m lucky that I am not responsible to any corporate entity that demands I negotiate in a narrowly focussed manner. That enables me and my clients to make the best of today’s buyer’s market… and potentially up-skill a few landlords in negotiating mutually beneficial deals at the same time!

What about you?
Have you had success negotiating a lease with a reasonable landlord or has your landlord been inflexible and hard nosed? How has this influenced your attitude towards your landlord and your intentions to stay or go? Leave a comment below and share your experiences with other readers…

3 thoughts on “How to educate your landlord”

  1. The recession has hammered our publishing business and the landlord was totally unsympathetic. There is a lot of empty premises around us but he was a right bastard. Very hard nosed and totally inflexible. We are now living in the back of our offices and have rented our house out to keep the company going. We’ve got 6 months to go and then we’re outta here. Never coming back. I hope he can’t find a tenant and goes under.

  2. Our lease renewal slipped through the cracks and by the time I got onto it, it was 3 days past the date I was supposed to have renewed. Should have used your services Peter! The landlord thought he had us by the short and curlies and was impossible to deal with – pig headed, arrogant, obnoxious and abusive and wouldn’t budge one inch. We ended up moving premises and are paying a bit more than before but just as happy with our new premises as we were with the old ones. Our old landlord has now been sitting on vacant premises for 3 months!

  3. I have been appalled at the cases over the last year or so of retailers under incredible financial pressure and who have gone to their landlord asking for help. The landlords were inflexible and basically just bloody minded.

    These are tough times but rather than accommodate a good client, as you or I might look at it, these inflexible bullies have adopted the might of right. As a result a number of these retailers have been forced into liquidation and the landlord has lost a tenant and had empty premises.

    One case I was involved in was a retailer with a national chain of 12 shops. Post liquidation they have one shop. Eleven inflexible landlords lost out. They’ve had to discount their premises substantially – I’m talking less than half what they were getting in some cases – and accept short term tenants just to get them filled up again, and some are still empty. They lost out because of their inflexibility.

    I am dumbfounded by the stupidity of these morons. Are all landlords bully boys or are there some sensible business minded ones too?

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