Creating Leverage in Lease Negotiations
One of the ways I keep up with all the current business and real estate news is by subscribing to RSS feeds of various websites and blogs. Today, I was scanning my Google Reader to see what I might be interested in reading, and a particular headline caught my eye. The item was a formal press release from a Los Angeles based law firm announcing they were actively exploring potential buildings for relocation.
Now as a tenant representation broker a headline reading, “Law Firm of Silver & Freedman Explores New Office Locations in West Los Angeles” was going show up on my radar. In my twenty years of representing office tenants, it has been my experience that companies typically want to keep this type of information on a “need to know” basis and prefer we operate discreetly.
After reading the press release, which I found highly unusual it got me thinking as to what was the motivation of this particular law firm to publicly announce their search for office space?
- Were they posturing with their existing Landlord by making a public statement that they were serious about moving?
- Were they testing a new receptionist to see if the employee was capable of handling the barrage of phone calls they are sure to receive from building leasing agents, tenant reps, office furniture vendors and anyone else under the sun who smelled a lead?
My theory is that they were attempting to create competition for their tenancy among various landlords in the West Los Angeles Office Market. Competition is probably the single most important dynamic to create leverage for a tenant seeking space in either a soft or a tight market.
I believe a tenant is better served by retaining a respected tenant representation specialist and let that broker create the competition among Landlords for their tenancy. This tenant may very well have retained a tenant representative, as I don’t know all the facts, but they are clearly seeking to create competition among various Landlords and they certainly wanted everyone to know they are considering moving.
Regardless, I could not let this item go without blogging about it, as I thought it would be a great segue into a blog post about “Maximizing Leverage in Lease Negotiations”, then I realized I have previously posted on this subject.