How to negotiate low warehouse rent?
The amount of rent paid for warehouse space is a crucial issue for every tenant. How to get the best rates, what do they depend on and how to avoid mistakes during the negotiations?
The rental rate is affected by many factors, such as:
- the location of the warehouse,
- the amount of vacant space in the market,
- the amount of adjustments introduced at the client’s request,
- the duration of the lease period.
The greater the availability of space in the given region, the easier it is to negotiate low rental rates. The key to getting the lowest possible rates as a tenant is to gain information advantage. The less the developer knows about the client’s investment needs, the more favourable the client’s position is. This is why it is crucial to prepare an effective strategy and take advantage of one’s market knowledge.
An effective strategy
The most common mistake made by tenants is not preparing a proper strategy to be used when communicating with the market, as well as revealing too much information to potential suppliers of warehouse space. There is also the mistaken belief that the tenant can only receive extensive market data by openly indicating their investment needs. This harmful practice forces the tenant into a very unfavourable negotiating position. All information about the client should be kept in absolute secrecy from potential suppliers and only be known to the consultant, who will work with the client to develop an action plan.
Long-term collaboration with a consultant
Another mistake is making use of the services of several consultants. Tenants might erroneously believe that it would improve their access to knowledge about available space. Unfortunately, there is a potential risk of releasing crucial information into the market and thus decreasing the client’s purchasing power. Entrusting the transaction to a single professional consulting company guarantees strict secrecy. It should be noted that an experienced consultant has extensive knowledge on warehouse space throughout Poland.
Therefore, they are able to provide the tenant with access to all available space, without the need to reveal the client’s information to developers. Moreover, the advisor has extensive knowledge on the existing buildings and the capabilities of suppliers. They know the principles governing the market and are able to work with the client to achieve the desired goal. Proper awareness of the difficulties involved in lease negotiations combined with the support of experts allows the tenant to easily receive attractive lease terms. However, the tenants should keep in mind that the rental rates depend on various factors, which must be taken into consideration when bargaining with suppliers.