Mistake 1: I don’t need to do any Research.
Regardless of any negotiations, you enter into, research is required to establish the outcomes you need to achieve. In retail, tenancy leasing research is needed on your industry, business, the shopping-centre, landlord and the current market.
Mistake 2: Waiting – Not Leveraging Time.
Every lease has two common elements, a commencement date, and more importantly an expiry date. Time can be your enemy or your friend.
Make a conscious decision to leverage your negotiations. In most cases, this means starting the process early. Don’t be the one waiting for the Landlord to contact you, by then it’s too late.
Mistake 3: Not Knowing the Numbers.
Make it your business to know how the real-estate you lease performs for your business, not how you perform for the real estate (landlord).
Know your occupancy cost percentage and sales per square-meter ratios, and how these compare to industry benchmarks.
Mistake 4: Not Knowing the Costs.
Before you look at any new lease, renewal, or option, have a clear and concise knowledge of your fit-out/refurbishment costs. However long you need to amortize these comfortably and make these known within the negotiations, your lease needs to reflect achieving these Key Performance Indicators as well.
Mistake 5. No Meetings/File Notes.
At each lease negotiation meeting, phone call, e-mail – make notes. Keep a file in date order that is easy to reference. After each meeting confirm your understanding of the points back to those you meet or call. Continue after the lease has been entered into, maintain this file and continue with your notes. You never know when you will need to rely on these to protect your position.
There are several more common mistakes made when dealing with your Lease and the Landlord/Centre Manager relationship but the 5 above are the ones that we have seen over the past 30 years in the retail property industry cost Lessees the most.