Eisenkraft, Noah (2016). "Office Rental Negotiation", Custom Negotiations, https://customnegotiations.org/.
All content is © Noah Eisenkraft 2024, all rights reserved.
You are the owner and sole employee of Executive MatchMaker, a boutique consulting firm that helps executives find new jobs. You started Executive MarchMaker last year after spending a decade working in corporate human resources. You love being your own boss! It's such a great feeling to help people find exciting new opportunities. Plus: you made more money in the last six months than you previously made in a year!
One of your big goals for this year is to move Executive MatchMaker out of your home and into a private office. While your clients seem okay with meeting in your home, a private office would make everything feel more professional. You have been looking for offices that do not have a long commute and will preserve your clients' privacy.
You recently toured an office at Corporate Court, a 40-unit office complex in Chapel Hill. The office's location is perfect. It's not too far from your house and has a lot of privacy. You are meeting today with the developer and landlord of Corporate Court to negotiate the terms of a lease.
You have identified eight issues that you want to discuss during the negotiation: office cleaning policy, security deposit, sublet policy, lease length, utilities policy, monthly rent, start date, and guaranteed parking allocation. Your negotiation is not complete until you reach an agreement on all eight of these issues.
As part of your negotiation preparation, you ranked the issues in terms of their relative importance. Your goal is to reach an agreement where you reach the desired terms on your most important issues. However, you should not feel limited by the list of issues described below. Feel free to add issues to the negotiation if they will help you create a better deal.
The most important issue in this negotiation is the lease length. An office lease can be any length. Some leases are renewed monthly while others extend over several years. You want to sign a short lease. You are not yet sure whether you will like having a dedicated office and want to avoid getting locked into a long-term lease. It is critical that you get a lease length of month-to-month.
The utilities policy is slightly less important. Utilities such as Internet, garbage service, water, and electricity are sometimes arranged and paid for by the landlord. You would like the landlord to pay the utilities. Having the landlord pay for utilities reduces your expenses. You strongly believe you should get a utilities policy of internet, garbage service, water, and electricity included.
The sublet policy is important to you, but not critically so. Office leases often include a clause that describes the circumstances under which the tenant can sublet the office to someone else in their absence. You would like a lenient sublet policy. Your work sometimes takes you to foreign cities for periods of a few weeks to a month. You would like to sublet the office to one of your consulting colleagues during these trips. You prefer a sublet policy of sublets allowed with no advance notice.
The next most important issue is the guaranteed parking allocation. A guaranteed parking space cannot be used by anybody except the tenant and their guests. Having more parking spaces will make it easier for your clients to park when they visit your office. You would like a guaranteed parking allocation of four spaces.
The remaining issues are relatively unimportant to you. The most important of these low-importance issues is the start date. The start date of the lease refers to the day that a new tenant begins paying rent. You do not want to start the lease soon because you are currently too busy to schedule a move. You'd like to get a start date of four months from now.
The second low-importance issue is the security deposit. Landlords often require a security deposit to cover potential damage caused by the tenants, in addition to the first and last month's rent. It is returned once the tenant moves out, less any money required for repairs. You want a smaller security deposit. Asking for a large security deposit signals less trust between the landlord and the tenant. If you had to choose, you would like a security deposit of zero dollars.
The third low importance issue is the monthly rent. Based on your research, a reasonable monthly rent for Chapel Hill is approximately $1,800 per month. Paying a lower rent gives you more to run your business.
Finally, the least important issue to you is the office cleaning policy. Offices get dirty. A landlord-provided cleaning service can keep everything looking great and well maintained. You would like as many cleanings as possible, especially with the landlord paying the bill. Any help with the office is always appreciated. While you don't plan to fight much for this, you'd like to get an office cleaning policy of biweeky cleanings.
Should you and the landlord fail to reach an agreement, you will lease an office with Beta Buildings, a nearby office park. Beta Buildings has offered you an okay deal. You plan to pursue this opportunity unless you are able to get most of what you want in your upcoming negotiation.