1. Understanding The Transaction From Both Sides

As a buyer, you come to each potential transaction with your own set of goals and priorities. Understanding a seller’s point of view can help you have positive and productive conversations as you negotiate. It’s tempting to shy away from in-depth conversations during the commercial real estate negotiation process, but it can be extremely valuable for all parties involved.

2. Considering Market Pressures

Markets can shift considerably from month to month — or even week to week. Dive into historical data and market forecasting in order to get a better understanding of potential market bias or shifts in local momentum.

3. Studying The Location And Showing Market Evidence

Be aware of recent and historical activity around the property. Compare local rents and property prices as well as occupancy rates, interest rates and other key data. For help determining a property’s value within the local market, turn to our Value Analysis team. We have years of industry knowledge and experience, and we’re eager to come alongside you as you make important investment decisions.

4. Noting The Effects On The Renters

While the negotiation process primarily happens between buyer and seller, the results of the sale can affect the people living at the property. Consider the renters during the negotiation process, and recognize that your decisions could impact their experience at the property — for better or for worse, depending on your plans for renovations and improvements.

Residents appreciate when new owners share their plans and maintain a similar leasing process. Being sensitive about tenants’ needs and expectations often leads to a smoother transition.

5. Remembering The Investment Matters More Than The Price

The push and pull of the negotiation process can be tedious, and it’s easy to get caught up in reaching the lowest possible price. The price matters, but you can’t start making money on a property if you don’t close on the property. Multifamily contract negotiations often involve a measure of compromise. Recognize that you can make a great, wise investment even if you don’t reach a rock-bottom price.

6. Fine Tuning Your Negotiation Skills

Negotiation capabilities don’t always come naturally, but they’re skills you can hone as you gain more experience. Every negotiation comes with an opportunity to learn, and if you’re not satisfied with an outcome, you can use that experience to make adjustments for future negotiations.

Our best advice for anyone who is new to the commercial real estate negotiation process includes tips such as:

• Come prepared with data that backs your offer
• Consistently monitor markets so you understand the lay of the land at any given time
• Don’t come off too eager or too desperate
• Explore the limits and know how to test them

Ultimately, the more negotiating you do, the more confident and successful you’ll become. Put these ideas into practice, and reach out to our team of professional commercial property negotiators for extra support and tips.