What should I negotiate when leasing property in Niagara?
There is no set rule and every market is different. I can only speak for Niagara in general.
I can start by telling you that if you plan on doing a 1-2 year lease, you won’t get much negotiating power…probably none at all for 1 year and less than you would think for a two year.
The breaking point where landlords start to negotiate a bit is for 3 year leases. If you are looking for a great deal look at doing a 5 year term or longer.
Many tenants may wonder why this is. The longer commitment gives the landlord some sort of reassurance that the tenant will be around long enough to make it worth their while to offer those extra incentives.
So what should you ask for? Well right now most landlords aren’t into spending money on tenants to re-do the space according to their criteria. What they prefer to do is offer free rent periods and/or temporarily reduced rent.
On a 3 year lease right now I’m finding the average is 1-2 months rent free and maybe a reduction in the first years rent.
On a 5 year term you can probably get away with 2-4 months rent free and possibly a reduction in rent for the first year or two.
Keep in mind this is not by any means standard for every landlord/property/location. Several other factors come into play. For example if this is a new business the landlord wouldn’t be as giving as they would if it were someone who has operated a business for years or a national franchise. The type of business could also be a factor and on some days the landlords mood. I don’t want everyone taking to heart these are things they should get in every scenario because it isn’t. As I have said before it is not always applicable. You may end up with some sort of variation of this or nothing like it at all.
The reason I wrote this blog is to not give away what landlords are willing to negotiate. It was written more so to keep tenants realistic when entering negotiations. Don’t be afraid to ask for a little more but don’t ask for too much. When you ask for too much your offer won’t appear realistic for them to pursue.
If anyone has any questions about anything I have written I am happy to answer as long as they are applicable to my market. Remember I only work the Niagara Region for Commercial, Industrial, and Office real estate sales and leasing so that is where my knowledge extends to.