7 Avoidable Mistakes that Tenants Make when Leasing

by / Thursday, 13 March 2014 / Published in Client Advocacy, CRE Trends, iCORE

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In working with clients around the world, we’ve come across a number of mistakes that could have been easily avoided had an experienced real estate professional been consulted.  Our team of professionals is always here to help clients navigate their real estate transactions.   For more information about our services or to schedule an informational session, email info@icoreglobal.com

1. PROCRASTINATION:
Some tenants are not aware of the time frame needed in some leases to complete the move-in process.

2. FAILURE TO ESTIMATE LEASING COST:
To accurately determine the true cost associated with a lease, a tenant must understand and evaluate a host of concepts relating to rent, operating expenses and incentives.

3. TENDENCY TO PAY TOO MUCH:
Landlords become nervous each passing day a space remains vacant. This nervousness translates into a potential competitive advantage for a well-represented tenant. Without accurate market research, tenants often do not even realize this advantage exists and accordingly spend more than they need to.

4. MISCALCULATION OF CURRENT AND FUTURE SPACE NEEDS:
Estimating space requirements becomes significantly more complicated as business needs change over time. Since future needs are difficult to predict, the tenant rep helps improve a tenant’s flexibility by carefully considering expansion, contraction and relocation rights.

5. FAILURE TO SEEK LEASE INCENTIVES:
Tenants are often unaware of overall market conditions, much less individual landlord’s situations. Consequently they routinely overlook available lease incentives, including increased finish-out allowances, smaller security deposits and free rent.

6. FAILURE TO UNDERSTAND THE BUILDING REPS LOYALTIES:
Some tenants believe the building rep is working for them. But prudent tenants understand that only their own tenant rep truly works in their best interests.

7. EXPOSURE TO UNNECESSARY RISK AND COST:
Tenants think they will save money if they “cut out” the tenant rep, but this is almost never the case, because the landlord, not the tenant, pays the fee or commission in the vast majority of cases. And, the landlord generally pays a full commission to the building rep whether a tenant rep is involved or not. It is far more likely the tenant will save money (and time) if he/she engages the services of a tenant rep than the reverse.

 

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