SAVE MONEY THROUGH YOUR COMMERCIAL LEASE By Kelly Cunningham
A dollar saved, is a dollar earned and with Jobkeeper and other Government assistance coming to an end, it’s more important now than ever to find the easy wins in saving money for your business. One of the large expense categories that most business owners spend very little time on, but is an easy area for significant savings, is the rent and terms of a commercial or retail lease. Tenant Representative, Kelly Cunningham, Managing Director of Your Leasing Co, says “Please don’t sign anything until you have run it past us first”!!! We represent tenants in getting the best rent and lease terms that saves our clients tens of thousands and sometimes hundreds of thousands of dollars over the duration of their lease. What is a Tenant Rep and What do they do? Being a business owner, the chances are that you’ve probably engaged in the ancient art of negotiating with the Landlords commercial real estate agent, finalised the deal and had that uneasy feeling of… Mmm, Do I really have a great deal for me? Did I leave much on the table for the Landlord? Where do I start to understand if I have a great deal?
In an ideal world wouldn’t it be great if you could….
• Hand all this over to a person who understood exactly what you needed and who had negotiated thousands of leases over a 25-year career? • Someone who was an expert in finding and presenting you with a video shortlist selection of new sites for you to consider and inspect. Instead of wasting time trudging through 10 or more locations. • Someone who was able to negotiate the best rent based on their professional and market knowledge, giving you confidence that you were on the right side of the deal. • Someone who could organise to have the landlord pay you to move into their property. • What if the fees for doing this work could be 100% covered by the value created by this person!
Sound like Mission Impossible? This service does exist and is commonly known as a Tenant Representative, A Tenant Rep or Tenant Advocate. We work exclusively for you, the business owner and we have your interests 100% covered. What You Can Expect from a Tenant Rep Business Like Your Leasing Co? The three most important things we do are…
1. Save Money and Add Value
Getting the maximum value from a commercial lease is a bit more than just negotiating the 108
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lowest possible rent. Most business owners will only get a chance to negotiate a handful of leases in a lifetime and can’t possibly be aware of all the areas that are available for saving or adding tens of thousands of dollars in value. A typical negotiation for our clients could include bundling the rent with a combination of incentives such as: • Leasing Incentive • Fit out Contribution • Rent Free Period • Rental Side Deeds • Rent Abatements • Work Undertaken by the Landlord at their Cost To maximise the best outcome for the tenant it is critical to know what elements are “must haves” and what can be negotiated in order to get the optimum terms for the lease over the next 3 to 5 years and beyond.
2. Relocating or Identifying New Sites
A Tenant Representative will take the time to understand your business, who your clients are and where your business should be positioned to have the best chance of maximising your sales. We call this “Building the Brief”. It doesn’t take long, and we do it over a coffee. The next step is where Tenants leverage our 25 years of industry experience and market knowledge. It’s also where our clients save a serious amount of time and energy by us undertaking the searching for them as part of our service. • We use our experience and local knowledge to research both on-market listings and offmarket tenancies that are only available through our professional network. • We meet with the agents and visit the sites to confirm that they fit the tenant’s brief. • We provide the tenant with a short list of video files to review before deciding which properties are preferred. Our clients love this part of the service because it saves them so much time. • Only then do we ask the Tenant to join us in looking at the sites that best fits the brief. • Then we begin the negotiation to secure the site.
3. Negotiating Renewals
A renewal is a natural break in the rent, where we can reassess what is happening in the market and put a commercial case together to negotiate the renewal with the landlord. What does Compounded Annual Rental Growth Actually Mean? After 5 years with 5% annual increases, the rent will have increased by 28% compounded yearly. At the end of the first renewal period in year 10, rent will have increased by 63% compounded and at the end of the second renewal period in year 15, rent will have increased by 108% compounded. The Question is… Has your sales growth kept pace with your rent? Should you Stay and negotiate or Relocate to a better location with better terms and the potential to increase your sales. Like More Information? Feel free to send us a copy of your lease and call for a chat. You can go to www.yourleasingco.com.au or find us on our socials by searching “Your Leasing Co” and like us on Face
Book and Linked In. Or you can just Call us on 1300 356 702 We look forward to hearing from you.
