When Do You Have Leverage in a Deal?

When you get a call-in from a leasing sign, a referral, etc. and they ask for the rate, the only time you have leverage in the entire deal process is before you give the rental rate.

By the way, I hate when people say “I’m quoting” or “I’m asking” a rate (See the article “Two Words to Never Use When Leasing Space”), so don’t ever say that.

By this point, you should have your market study done. I’m not talking about information from LoopNet or anywhere else online. I’m talking about hands-on information that you have dug up yourself (See the article “Retail Leasing 101: Market Studies”).

On this first call before you give them the rate, they are trying to impress you so you know to take them seriously as a prospect. This is your time to gather data on the prospect by asking key questions: How many locations do you have? What sf do you require? What do you like about our center? Have you looked at neighboring centers? How much will it cost to open the business? Do you have the required capital?

If you know that you are the only center with the sf they require, you can use that information to provide more value to the center by sticking to a higher rent. On the flipside, if you know that there are multiple centers that meet their sf requirements and you really want their use in your center, it’s a different story.

If they are serious prospects and not tire-kickers, they will provide you with the information you need.

Take another 3 minutes to ask another 5 questions before you give them the rate! It’s the only time you will have leverage in the deal.