In the early phase of negotiations, it is important to develop basic trust, explain realistic objectives, learn relevant facts, and establish procedural guidelines. Careful preparation will set the stage for this process. The one who is best prepared and has anticipated objections generally has the advantage right to the end.
There are certain strategies that help. For example, meeting at your place, if possible, or at a neutral location may eliminate distractions or interruptions, and may allow you to plan seating or even lighting to your advantage. Because important decisions are usually made at midday, scheduling the meeting over lunch would enable you to start with some small talk that may reveal more about the other person's needs and personality. Above all, schedule enough time.
The early phase is the time to ask questions, probe for information, and concentrate on what the other party is saying and how it is being said. Establish reasonable expectations. This is also the time to show how much both sides have in common, and also learn about related problems. During this phase, listen carefully and attempt to get the other side to talk and make commitments. Do most of your talking for the middle phase, when you will concentrate on problem solving.
During the middle phase of negotiations, explore alternatives to show you understand the other party's position. At this point, you can start to narrow down the issues and establish a positive tone and a sense of coming to an agreement. Keep asking the other party to explain the reasoning behind every demand and be ready to explain your own. Observe the person's eyes and body language carefully when they are making an important point. Try trading small compromises in return for larger ones.
Never concede anything too quickly; be sure each concession is acceptable and always made for something in return. During these negotiations, save your resources for the important issue of pricing.
Throughout negotiations, it is important to avoid common pitfalls. Do not ask for too little. If you do not ask, you will not get. Do not make excessive demands that destroy your credibility. Know exactly what you will settle for, or you will cede control of negotiations to the other side. Be prepared to break a stalemate with new information or by changing the subject or by asking questions. Work within a time frame and establish a deadline to gauge your time. If you are negotiating with more than one principal, leave something for the other principals to negotiate just before closing.
When it is time to wrap up the agreement, the parties should review together what is agreed upon and confirm that all the problems are resolved. This is not the time for you to bring up new issues. If you have everything you want, stop negotiating. As you get into the document stage, be prepared to illustrate to the party's lawyer how and why they have a good deal.
In working out the documents, ask the other party's lawyer to note any questions or give you any comments before changing the language. Once the other party is committed to its own language, it is more difficult to reverse direction.
Finally, be available in person when the documents are prepared to answer any last-minute questions or to resolve any remaining matters.
When the deal is done, analyze your approach. Remember that hard work, practice, and experience is essential for consistent success.
Source: NACORE International
More information on lease negotiation may be obtained from Negotiating Commercial Real Estate Leases by Martin Zankel, Dearborn Financial Publishing (800-982-2850), which provides nontechnical guidance to elements in leases and other related topics. The Tenant's Handbook of Office Leasing by Stanley Wolfson, McGraw-Hill Publishers (800) 262 4729 features negotiating tips for leasing contracts accompanied by tables, charts, graphs and forms.