Reduce Your Rent

In the current economy, many retail chains are negotiating rent reductions. In many areas, the vacancy rates have doubled making rent negotiations easier. According to the Los Angeles Times, some tenants are getting their rents cut by as much as 50%.

How do you negotiate a lower rent?

The first thing you need to do is ask. If you don't ask for a lower rent, you won't get it. Most retail store owners never ask. After all, you already negotiated your rent. You are a person of your word. We tend to be embarrassed to ask for that rent reduction.

Let your landlord know that business is down and store traffic is down. You don't need to plead poverty. You can offer your landlord some facts.

Even if you can't negotiate an immediate rent reduction, you can ask your landlord to help in other areas. For example, your landlord may be able to give you some extra perks such as free trash removal (or reduced removal costs if you actually tote the trash to the trash bin). Your discussion with the landlord could lead to increased signage. Prior to having a discussion with your landlord, think of some items that you can negotiate that won't actually cost your landlord more money.

Here are two articles that can help you with rent negotiations:
- Lease Negotiating Strategies & Tactics

- 9 Ways to Negotiate a Rent Reduction

About 700 shopping center owners and managers across the United States recently received form letters from a major big-box retail tenant. "Since times are tough, we've decided to unilaterally reduce our rent by 25 percent," the letter read. Enclosed in the envelopes were checks to the landlords for the newly decreased amounts. In all, that 25 percent slashing of rent translates into a $30,000 annual reduction per lease and total annual savings of $21 million for the retailer in question. Read the complete article from Retail Traffic magazine.

And you, have you already tried to negotiate your rent?


Ricardo Bezerra
EZB Solutions
ricardo@ezbsolutions.com
http://www.ezbsolutions.com