The Negotiating Power is Shifting with Office Leases

With the economy showing positive signs of recovery, savvy business owners and professionals are getting smarter about where they put their office and how to run it more efficiently — and for half of the expense.

They are asking for lower rents, more benefits and less responsibility.

With the surplus of office space available, renters are now in a place of negotiating power when it comes to leasing a commercial space. However, there are a few things that you as a property owner can do to make sure that you keep your negotiating power in place and keep it fair, yet profitable for you.

1. Change name for type of office space

By adding in higher level titles to an office space such as an “Executive Suite” or “Commercial Loft,” you can give more value to the space as well as make it more attractive. By placing more of a “city style” approach in the marketing of your space, you can attract larger prospective tenants. This can also help you create more of a demand for the space which puts you in a better place when it comes to who you lease to and exactly what the terms should be.

2. Market constantly, even when you are at a no-vacancy status

The negotiating power has shifted in the commercial arena, however the owner can have a bigger advantage if they have an ongoing plan to market the space in the community. I am not referring to paying for advertising the space; simply look at the properties that are in areas where professionals like attorneys, real estate brokers, insurance brokers and chiropractors are in need of clean, intelligent space and reach out to them either by phone, mail or online. Keep in touch with them every other month by reaching out through a direct mail piece or phone call; you never know when they will be on the hunt for a larger office space or a different location.

3. Add value and partner with virtual service companies

Professionals need support staff now more than ever. However, the expense of having onsite receptionists can be costly. Reach out to a virtual services company in your area, and add them into your potential offerings or even advertising.

Dentist offices are popping up now with their receptionist on a large computer flat screen to check in patients. This can save hundreds, even thousands of dollars to professionals. Make sure that you do your due diligence before you tie your building brand name to a virtual service company. A few places to check online: or

4. Target home-based companies and give incentives to move

Because office space has become more open and available as well as affordable, small business owners and professionals are shifting from being at their home office over the past few years to an offsite location. It’s nice to get out of the home and head to a quiet place to get some work done. Not to mention, this saves people from having that feeling that they need to work whenever they walk in the front door of their home. This is an excellent selling point. Make enticing offers to include the benefits of it being an affordable solution as well as a way for business owners to separate home from the office.

5. Hire a Broker that can locate surpluses and shortages

It is vitally important that you have a broker on your side that is not only knowledgeable about the area where your building is located, but knows where there are gaps and opportunities as well. Ask them simple questions such as, “What are your client’s average occupancy rates?” and “How well are you connected in the professional community?” Another great question is, “Have you helped your clients/investors market their property to fill their available spaces? If so, what did you do for them?”

[stextbox id=”grey”]These tips are provided by Pete Baldwin, designated broker and owner of Platinum Realty Network with offices in Scottsdale and Flagstaff, Ariz. With over 25 years of experience in business and real estate, Pete specializes in country club communities and second home investments, including large commercial portfolios. He also owns an Arizona branch of a family-owned, Montana-based company Baldwin Log Homes – Arizona Territory and has become the area leader in full- custom, handcrafted log homes in Northern Arizona. For more information, please visit