From Vision to Victory: How Strategic Lease Negotiations Secured Our Clients’ Growth
Our client Sarah had a single real estate agency in Brisbane targeting a particular demographic. She was wanting to grow her business by expanding into a new location with a similar profile. With strategic negotiations, secure future growth became a tangible goal for her expansion.
Sarah’s initial vision was to expand to just one more location. She also had a goal to secure additional locations down the track.
Despite working in the real estate industry, she recognised that her specialty was residential real estate, not commercial Lease negotiation. She understood that our expertise would help garner better results than what she might have achieved negotiating the next Lease on her own.
Sarah discovered Your Leasing Co.
By luck, Sarah came across us, a team of Tenant Representatives who specialise in all aspects of commercial Lease negotiations. Conducting these strategic negotiations daily equips us with the knowledge and experience to engage with Landlords as an equal. This alleviates any anxiety or stress for Tenants like Sarah. The power imbalance that exists disappears. We step into the Tenant’s shoes, ensuring business owners like Sarah achieve the best possible deal. Thus, they don’t feel pressured or coerced into accepting an agreement they are not comfortable with.
In this case, Sarah happened to encounter Your Leasing Co. at just the right moment.
After a phone call with Sarah, we gained a detailed understanding of her vision. We also understood Sarah’s objectives for the new Lease. These would contribute to strategic negotiations for future growth.
We stepped in to represent Sarah in the Lease negotiations and found two suitable new locations.. Therefore, to maximise the best possible outcome for her next new location, we start negotiations on both.
Sarah valued having someone reliable to act in her best interests and negotiate on her behalf. We secured an agreement that was affordable and aligned with market trends, rather than simply agreeing to the asking rent. The exciting part was that, thanks to the work of Your Leasing Co, Sarah was able to successfully secure both of the possible locations. This ensured strategic negotiations led to future growth.
Your Leasing Co successfully negotiated a really favourable outcome for Sarah on both locations! Let’s recap those outcomes …
Where did we start?
Sarah’s starting position was a straightforward, what we like to call “vanilla” deal, on both of the possible locations. Collectively, the Landlords’ asking rents came to $311,250 with annual increases of 4%. There was an initial term with an option and full security coverage in the form of bank guarantees and personal guarantees from Sarah. Strategic negotiations were key in securing favourable terms that would support her future growth prospects.
Where did Sarah end up?
Your Leasing Co. were able to negotiate a combined total savings of $396,570.49. We achieved this through a combination of rent savings and incentives across three Leases, including:
- A combined rent saving of over $80,000 plus GST
- Reduced annual increases to either 3% or 3.5% per annum
- A combined saving of $4,000 in uncharged legal fees
- Rent free valued at just under $120,000 plus GST
- Combined cash incentives of $175,000 plus GST
- 50% reduction in carpark rental, saving close to $15,000
Extra wins …. more hidden treasure unlocked …
Streamlined Make Good Requirements: We negotiated minimal end of Lease obligations. Only patching, painting and removal of loose fixtures were required. This significantly lowered any investment required at the end.
Flexible Lease Options: Two further options secured on each Lease, enabling extended occupancy, a crucial element in strategic negotiations to secure future growth.
Reduced Bank Guarantee: Initial bank guarantees required were six months. These were negotiated down to three months, freeing up working capital for Sarah.
Waived Personal Guarantees: Personal guarantees were eliminated completely. This limited personal liability for Sarah and secured the Leases with just the bank guarantees
Demolition Clause Mitigation: We negotiated a $150,000 compensation payment should a demolition clause be invoked within the first three years.
Landlord Funded Fitout: The Landlord agreed to deliver the space as a warm shell at no cost to the Tenant. This allowed for custom modifications, with reduced entry costs.
Sarah was thrilled with the savings and additional benefits that had been secured through the negotiations. She felt a sense of relief for entrusting the Lease negotiation process to a professional. The expertise and market knowledge of Your Leasing Co provided her with confidence and peace of mind. She knew that the deal was assessed rationally and commercially. The Landlord’s leasing representative’s experience and knowledge were matched, resulting in outcomes she couldn’t have achieved alone ensuring her future growth was now attainable.