Office Rental Negotiation

Landlord

You are the developer, owner, and landlord of Corporate Court, a 40-unit office complex in San Francisco. You originally built Corporate Court 15 years ago and have maintained an average monthly occupancy rate of 93%. You are proud to run such a successful business.

One of your long term tenants recently decided to retire and give up their lease. The vacated office is a ground-floor corner unit in Building 3. It is easily accessible from the parking lot, but also far enough from foot traffic to ensure privacy. The retiring tenant used the office to see patients in her psychotherapy practice. It's a perfect office for a sole proprietorship or a small business.

You are meeting today with the owner of Executive MatchMaker, a boutique consulting firm that helps executives find new jobs. The owner of Executive MatchMaker toured the vacant office recently and said that it meets all of their needs. You scheduled this meeting to negotiate the terms of a potential lease.

The monthly rent is the only issue that matters in this negotiation. Based on your research, a reasonable monthly rent for San Francisco is approximately $4,730 per month. Charging a higher rent gives you more money for business.

Should you and the prospective tenant fail to reach an agreement, you will lease the office to Dr. R. S. Townsend, a psychiatrist whom you met at the country club. Dr. Townsend has offered you a monthly rent of $3,870 per month.