Author: Aaron Weiner This post originally appeared on Insights and is republished with permission. Find out how to blog with us on theBrokerList.
Aaron Weiner
Nothing Is Better Than Face-To-Face Negotiations
If I make a mistake and many can learn from it, then it is worth sharing.
Experience has taught me that it is crucial to explain to my prospects right up front the importance of preparing their financial documentation so that when the landlord asks for it, it is ready to hand over. This ask by the landlord is not an invasion of privacy. I tell those same prospects to think of leasing in the same light as going into a new bank and asking for a revolving line of credit for your business. What would you tell them and show them to inspire them to give you the money?
I recently found myself in an embarrassing situation. The client/tenant operated a family-owned business that had been selling the same product and service continuously since 1968. That made me happy. That was sure to convince landlords of small industrial properties that they had nabbed a great tenant. Of course, I mentioned to my client that the landlord would eventually request financial information, and the middle manager I was dealing with indicated that they would cooperate with that request. I never pressed the matter further.
Like every other business, commercial real estate is a people’s business. When it comes to trust, nothing carries more power than a personal connection. Click To Tweet
Fast forward to the negotiations and when the request for financials came in and I outlined what the landlord needed – annual income and expense statements and one or two redacted corporate tax returns – he took the request upstairs and was rebuffed. The company was very private and did not like to share its financials with anyone. The C-suite said they had done several warehouse lease deals and never had to provide financials. “They knew who we were and that we had been in business since 1968 and that was enough.” I was gobsmacked. The company was legit but now I had to figure out a way around the financials. What could I do?
First, I faced the reality that this was an issue of trust between the tenant and the landlord. The brokers’ ability to navigate the deal had reached its limit. I requested a conference call between the family members that own the building and a senior officer at the tenant’s company. They had a friendly conversation and pierced the veil of mutual mystification. The focus shifted from the awkward situation to the people involved. It worked. A little twiddling with the security deposit and the lease got signed.
Like every other business, commercial real estate is a people’s business. When it comes to trust, nothing carries more power than a personal connection.
Do you have your own lease challenges that you would like to discuss? Feel free to call me directly or send me an email.
Aaron Weiner, CCIM, CPM, LEED AP
[email protected]
(213) 258-6921
