Tenant Upper Hand

The art of the negotiation pales in comparison to the art of being a tenant in a tenant's market.

 

Boris Yelyashov, right, reps a variety of tenants for MB Real Estate, a full-service firm with offices in Chicago and New York. Here with tenant rep group head Andy Davidson, he says businesses should review their leases as a priority when they evaluate all overhead costs, even if they're not near expiration. This competitive market, he tells us, often means "a landlord would rather keep a tenant, even in a smaller space." But, tenants should also plan ahead. Three new office buildings come online this year, so he expects a competitive market that will put tenants in the driver's seat to negotiate concessions including expansion rights to set up for future growth.

 

MB Real Estate reported that CBD sublease space is up from a low of 2.3m-SF in mid-'07 to 3.4m-SF now. With landlords trying to undercut each other to get buildings filled, now is the time for tenants to get a good deal, Boris says. He saved a tech company in the suburbs $3.8M over three years by negotiating with a landlord who wanted to keep the tenant in the building.

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