As appeared in…New England Real Estate Journal
Mistakes? Everyone makes them. Here is my personal list of the ten biggest mistakes tenants make when it comes to lease negotiations and facility selection … and how to avoid them.
- Starting the Process Too Late ‐ Most companies fail to realize how long it takes to perform a well‐executed commercial real estate transaction. The search for commercial space is not like searching for an apartment. By starting the process early, tenants gain control of the process, increase their number of options, and enhance their leverage. Identifying a firm’s real estate needs, looking at properties, and conducting a comparison analysis can take as little as a week for motivated companies already familiar with the local market. Unfortunately, this is just the beginning of a process that can take several months. Negotiations with several landlords to obtain the best transaction can take weeks, even months. Once the parties have agreed to lease terms, lease preparation, negotiations, and execution can easily take weeks or months. Once the lease is signed, some degree of tenant finish work is usually required. Unless it just cosmetic changes (carpet, paint, etc.), expect several weeks to prepare construction documents, a week or so to competitively bid the work, a few weeks or a few months to obtain a building permit depending on the municipality, and one to two months for actual construction. Therefore, savvy tenants generally start their search for space at least six months prior to the time they expect to move and more if a large/complex transaction or build‐to‐suit is a possibility. Read more