Renegotiate to save
If you are comfortable in your currently leased space, you may have one of the best advantages in today’s environment. Fearing empty buildings, many landlords are willing to renegotiate a lower rate in exchange for additional years on your term. The process, known as “blend and extend,” is best for renters with about two years left in their lease, but some owners will talk with more time remaining — especially if the property has a mortgage coming due in the next few years. Having solid tenants in place makes the owner more attractive to lenders, and that can give you an upper hand in negotiations.
“If you say you will stay another five years and lock in and negotiate a more attractive rental rate, the landlord will most likely — especially if there is pressure from the bank — say they want the longer-term deal,” Bolter says. “That will bring stability to the property and the tenant can use that to their advantage.”
Even with the scales tipped to the tenant, it’s unlikely the proprietor will reduce rates without you first doing some legwork. It’s wise to have your financial statements ready and be willing to talk about your long-term plan on the property.
Before you approach the owner, think about things from his or her perspective and be prepared to appeal to the owner’s needs, rather than pleading your own case for cheaper rent.
Your current occupancy gives you leverage for a contract that benefits both you and the titleholder. Still, should a landlord shoot down your proposal, you likely have options down the street.