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How Startups Negotiate Favorable Leases

How Startups Negotiate Favorable Leases
Photograph by Wendy Maeda/The Boston Globe via Getty Images

Whether they are office or retail leases, startups typically have little leverage with landlords. But there are ways to negotiate for the best terms possible. With real estate markets coming back to life in some areas of the country, I spoke with two attorneys and an agent for advice on negotiating a commercial lease.

Get representation. That means a commercial real estate broker familiar with your industry and your location. Get referrals from tenants in the building and ask brokers what specific leases they have done in that building, or at least that neighborhood. Commercial markets are so specialized, someone who’s not up to date is not going to be able to get you the best deal. “Never go into a meeting unrepresented. And don’t go with a broker who represents the landlord,” says David Mason Eichman, a West Hollywood (Calif.) real estate attorney who represents many startup businesses. “A landlord’s broker is representing his interests and could bully you, especially when it comes to getting out of a lease or renegotiating.”