Leases

My mother alerted me that I haven't updated my readers (her?) about what's going on with the space.

I am not getting either of the two spaces I mentioned earlier. The one I liked so much with the patio was just too expensive to get into. The other one is not zoned properly, and while we may have been able to work around that, it was the holidays and the right people didn't return my phone calls.

(Note to self: Always answer the phone and return phone calls! When I need something done and someone doesn't answer the phone or call me back right away, I just move on to the next person. Often that means someone lost some business.)

So I found a space in Emeryville that I will probably sign a lease on this week. There is a little bit of an art to negotiating leases, and I'm learning a lot about that right now. I think I lost the last deal because I was cash poor and I let everyone know it. Landlords don't like that. They need to believe you can come up with cash if you need to. It's not about the cash necessarily, it's about the ability to come up with cash.

I don't have to come up with much cash for this space in Emeryville, although I never made a big deal about not having it. I just told them what I needed. I learned to be firm and clear without appearing needy or without resources.

When I signed my first lease on the current space, people told me to negotiate, but I didn't do a very good job. I actually didn't negotiate at all, although I thought I did. I didn't ask for any decrease in the rent that she was asking. The market was better for landlords then, but I'm shocked at myself for not even asking. I ended up paying way, way too much, and I didn't even know it because I hadn't really done my research. Yes, I looked at listings online, but I never bothered to find out what landlords would actually take, which is can be quite different from listed prices. This time, I got the rent knocked down considerably. I am paying about $1.12 per square foot, and I've definitely done my research this time, so I can say with certainty that I am getting a bargain.

My advice to anyone negotiating a commercial lease is to ask for what you want. Shoot low. In this market, they will counter and they might even say yes. Never, in any market, assume that you have to pay what they're asking. Never assume that you have to put up all of the cash they request. Always get free rent for your build out. Ask for the landlord to make improvements.

I thought I was negotiating my first lease, but I never asked for anything. I only asked for things that, looking back, I know are very, very small and would probably have been included in the lease anyway. Like the ability to sublet. That was my big coup. Turns out, you can always sublet unless it specifically says you can't in the lease. My second piece of advice is to be prepared to walk away. If you don't get what you need, let it go. There are other spaces, and your ability to walk away is your best friend in the negotiation. If you do walk, you will have gained a lot of negotiation experience, and you'll know more about what the market can handle. You'll know how low you can go and what's reasonable to expect next time.

I've always hated negotiating. I live in Mexico City for five years, and would still pay full price for trotskys on the street (just like a tourist, fresh off the boat) because I just didn't want to deal with it. It's all fear, right? I'm fearful that people won't like me or will recognize me as being inexperienced and naive. I'll feel silly if I ask for the wrong things. But we have to ask for what we want, in business negotiations and in life. We have to trust our desires to be real and God-given and legitimate in the same way that we are real and God-given and legitimate. There's not that much difference. So ask. Go for it.