The market-value appraisal of the current lease agreements, recommendations on their optimization and conducting negotiations with the owner

At the moment the commercial real estate market in Russia is “the tenant’s market”, i.e. when the commercial terms of lease and purchase of the property are formed only on the basis of the demand and paying capacity of the target audience.

This moment is the most optimal for reviewing the current lease agreements and coordination of new commercial terms, which would meet the current requirement.

Some tenants conduct negotiations on their own directly with the owners and appeal to the general situation on the market and the reduction of average rent rates, asking to review commercial terms of the current contracts. But tenants are not always capable of conducting reasoned negotiations since they do not possess actual information on the real situation in the falling market.

Exactly for solving these issues we offer a separate service of market-value appraisal and support of the commercial terms review under the current lease contracts.

The benefits of brokers’ support in this kind of negotiations are as follows:

• The actual data on the starting commercial terms in similar buildings
• The reliable information on actual commercial terms provided by owners to various clients
• Available information on the actual rent rates under the signed lease agreements for similar premises

This allows a broker to present the tenant’s interests with the maximum efficiency during negotiations with the owners.

While rendering this type of service the following actions are performed:

• Comparative analysis of rent rates or cost of non-residential properties similar to the leasable premises, with the account of the current market situation
• Analysis of the current lease agreements
• Preparation of comments on the current commercial terms
• Preliminary selection of new premises and obtaining of alternative commercial offers
• Recommendations on prolongation/termination/optimization of commercial terms of the current lease agreements
• Preparation of the summary table of costs and/or profits under current or prospective agreements
• Conducting negotiations with the current owners and coordination of new commercial terms to the benefit of the tenant
• Legal support during resigning of the current agreement or execution of a new lease agreement
• Assistance in concluding agreements and analysis of agreements with the management/maintenance company

Broker’s fee for providing this type of service is formed as a bonus – a certain percent of the client’s saved rent rate costs.