An LOI is not a price tag 🏷 Negotiation is expected!
Jan 03, 2023ICYMI: “LOI” stands for Letter of Intent, and it refers to the short document that you and your landlord will trade back and forth to nail down the most important business terms of a potential lease -- the fundamental elements of your relationship together.
We’ve heard it so many times from first-time retailers. “Oh, I already got an LOI on that space, so this is how much the rent costs.” NO, SIR! This is not Crate&Barrel where standard shams cost $39 and a glittered foam apple costs $72.
When you start searching for the right space, you’re not in a Crate&Barrel at all. You’re in a loud, crowded Turkish bazaar. You browse stalls until you find something that catches your eye, and then the bargaining starts. So the LOI is the landlord’s starting price -- and they absolutely, positively expect you to haggle negotiate.
OH NO, you said? You hate negotiating because it’s soooo awkward and uncomfortable? Yes, it certainly is. And if you’re a normal person (not Chris from my graduate school class who acted all “oooh I love negotiating!” No you don't, Chris!) you dread negotiating, too.
Well good news, you’ve hired an experienced retail real estate broker. Your broker will not only guide you in using your business plan to put together a smart counter offer, but said broker will do all the communicating on your behalf. So you can hide behind the rolled up carpets and just shout “not a penny more!!!” and “how ‘bout THAT rent commencement date!!!”
See? Negotiating can be fun!
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