The Other Side Isn’t Always Negotiating the Deal You Think They Are |
One of the things I enjoy most about Midtown office leasing is that every once in a while, a negotiation makes me rethink something I thought I understood.
Last week I had a deal that wasn't particularly difficult. We got it done. But I've replayed the conversation with the landlord a dozen times since.
We had found a suite that checked all the boxes for our client, and after a few rounds of negotiating, we were getting close to terms. Then the client hired a few more people and asked if there was any way to take some space from the empty neighboring suite.
I actually thought it was great news. Who wouldn't be happy? The landlord was about to lease more space, the client got the space they needed, and everyone should've been happy.
The original deal was coming in around $13,000 a month. With the additional space, it was estimated to be $16,500. The client had drawn a pretty firm line at $15,000. I remember thinking we'd probably just shave the rent down a bit, keep the monthly payment where they wanted it, and move on.
So I called the landlord and said, "This is the client's number."
They said, "We're not lowering the rent."
I said, "I know. This is probably a long shot, but we're only talking about the extra piece of space, and it hasn't even been measured yet. Is there any way to be a little more conservative with how that part is measured?"
I didn't think they'd go for it, but the next day they called back and said yes.
They kept the exact same price per square foot, but they adjusted the measurement on the additional space and got the monthly payment almost exactly where the client needed it. We got the deal done and everyone was happy.
Why did the landlord care if they got to $15k by lowering the price per square foot or by adjusting the square footage? Either way, the monthly payment ended up at $15k.
If they lowered the price per square foot for us, that number didn't disappear once we signed the lease. It became the comparable for the next broker, the next renewal, and every future conversation about what deals were getting done in the building.
It was a good reminder that the other side isn't always negotiating the same deal you think you are.
Until next month,
Ralph
Ralph Chattah
(646) 661-3927 | ralph@noahre.com