Last Month I discussed 15 Reasons Landlords say “NO” to Lease Negotiations, this month I wanted to tell you 12 Reasons Tenants should say “NO”!  Multiple reasons exist for a tenant to decline such a transaction, many of which are simply the flip side of the reasons Landlords say “No!”.  They include:

  1.  Insufficient dollar amount of financial incentives offered by the landlord
  2.  Structure of financial incentives or other transactional components do not support tenant’s business objective
  3.  Delayed timing of financial incentives that results in diminished benefit and erodes NPV
  4.  Too many restrictions placed on the financial benefits or other elements of the transaction by the landlord or lender
  5.  Too long a lease term required by the landlord or its lender to justify other terms associated with the transaction
  6.  Inflexibility on the part of the landlord in agreeing to non-financial or other business terms
  7.  Lease document is too strenuous or one-sided, favoring the landlord
  8.  Lack of faith by the tenant in the landlord’s ability to perform or deliver on commitments made, including the landlord’s ability to fund construction or service commitments
  9.  Concern over lender’s willingness or ability to modify or decline renegotiated terms
  10. Tenant’s misinterpretation of current market conditions and achievable terms
  11. Unreasonable expectations of the outcome by the tenant
  12. Lack of qualified real estate advice and representation provided to the tenant

Other reasons may exist and this is not intended to be complete or all encompassing.  For tenants, it’s pretty simple;  improve their terms, both financial and non-financial, to a point where it makes sense for them to extend their lease.

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Filed under: September 2010Uncategorized

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