Having now identified the 'premises' of your operation, what are the next steps to follow as you approach the Landlord? As noted earlier, hopefully you have engaged the services of a qualified leasing specialist to assist in negotiating a lease deal with a particular Landlord.
The first step is to qualify yourself or your operation with the Landlord. In short, this is a background/bio of your business and your credentials as a Tenant. This might include years in business, expanding/downsizing, number of employees, and why these new premises are "fit for the future". Depending on the situation, you may need to provide financials (particularly if the Landlord is providing significant TI dollars), a credit report and/or references.
In the case of a ‘new start-up’, you may need to provide a Business Plan which lays out your sales projections, expenses, capital investment requirements, and working capital needs. Given the fact the business is new, this should be supported by your credentials on a personal basis. Landlords are typically adverse to new start-ups. The more details you can provide at the outset the better. Be prepared to have a conversation on a PERSONAL GUARANTEE, particularly if the Landlord is investing capital on your behalf into the premises.
Beyond lease rate terms (the dollars of the deal), what item or items are most significant to your future in this location? Is it a suitable TI allowance? An extended rent free period? Dedicated parking? Early termination rights? Restrictive covenants on neighbouring businesses? Whatever the key elements of the deal are, you need to make sure they are front and centre as you begin the negotiation. The key points need to be 'on the table' now, and not left for the lawyers to deal with,
when finalizing the formal lease document.
Successful lease negotiations do not just happen, but are planned for and well-executed by Tenants and their Leasing Representatives. As with everything in life, you do not get what you deserve, but rather what you negotiate.
Next up from the TENANT PLAYBOOK: papering the transaction and types of documentation. As always, we're just a click or call away from discussing investment opportunities here in Windsor – Essex!