February 2024 Newsletter

Two Recent Engagements | 

On two recent client engagements, the client's call came in after receiving an unsolicited proposal from their Landlord to extend their lease, even though there was 3+ years remaining on the term. For context, both clients were <10,000 Square Feet and occupied space in Class-B Midtown buildings < 80% occupied.

The Landlord’s proactive outreach to extend these leases at low rents well before the Tenant had an opportunity to think about moving (3+ years out from lease expiration) was unusual as Landlords are usually the most optimistic on how high rents will go.

However, the common motivator for these landlords was an impending opportunity to secure an extension on the building’s mortgage provided they had longer lease commitments from these tenants.

In addition to the already favorable market conditions for tenants, both of these clients unknowingly found themselves in a position with great leverage to extract an extremely appealing deal.

After probing and educating themselves on the market, mainly by evaluating the alternatives available, these clients came to understand where both the best deal was for them outside the building and hence, what would be worthwhile for them to accept from their Landlord in exchange for an early lease renewal.

Even the best negotiators are useless without the best information!

Until next month,
Ben

Ben Blumenthal
Principal Broker | Noah & Co.

For the rest of our February 2024 Newsletter, click here.