We live in a world where we are not only told it’s impossible to have our cake and eat it too, but that there’s even something wrong with trying. This kind of thinking has the potential to create big-time problems, especially if you are trying to apply it to the everyday world of the commercial real estate broker. By adopting this mindset, you essentially concede that in order to be able to declare a “job well done” when working out a deal, you’ve got to somehow clobber the other side into submission, ensuring that the number of toys you walk away with are far greater than theirs. However, world class brokers understand one thing: commercial real estate negotiation strategies aren’t about who walks away arms raised – they’re about both sides being able to declare victory.
The pessimists in the audience might look at that last sentence and bristle at its feel-good sentimentality. But the bottom line is this: trying to score a win-win situation during real estate negotiation isn’t about aiming for the warm fuzzies, and it’s not about “doing the right thing” – it’s about conducting smart business and realizing that without give, there’s no take. That’s why they call it negotiation, after all, and not highway robbery.
So how does the average commercial real estate broker who’s never tried to achieve a win-win negotiation go about getting started? You can start by trying some of the following commercial real estate negotiation strategies:
- Work with your client to reshape the vision of what victory implies. In fact, try to eliminate the word from your collective vocabulary. Victory usually infers that there’s a loser, a vanquished foe left wallowing in the dust. It’s important to achieve objectives of value and critical terms such as rental rate and tenant improvements. More importantly, ensure nobody feels as if they’ve been beat up, duped, or forced to surrender something for nothing. The brokers that I have seen be successful over the long haul are always empathetic, yet remain assertive by not being too easily accommodating.
- Don't demonize the opposition. One of the biggest mistakes that people make when entering into negotiations is to go forth holding age-old stereotypical views. For example, there may be a tendency to lump all landlords into the category of ‘difficult to work with’ or ‘greedy,’ just as the tendency may be for landlords to see tenant rep brokers as having money lust. Holding these types of views only hinders negotiations.
- Drop the “us vs. them” mentality, also known as "tribalization." Effective commercial real estate negotiation strategies require that you view the other side as a willing partner who’s there to help you achieve your goals, and not an obstacle to be overcome.
- Avoid fighting words. This is really an extension of having a "fight or flight" mentality. This means not only avoiding harsh language, but avoiding combative sentiments altogether. Imagine telling someone to "go pound sand" through the use of eloquent speech, but in the end the result is the same. Adjustment of attitude and the espousal of a positive outlook works wonders when you’re negotiating.
- Enter talks with a pre-decided best alternative to no negotiated deal. In other words, come prepared with a "plan B" in the event that negotiations don't quite go the way you planned. Having already developed a creative alternative solution will save the time you'd otherwise spend regrouping and reformulating your negotiation strategies. For more helpful tips on preparing for negotiation, visit www.cardinal-partners.com and download our free Prepared to Win-Win™ negotiation worksheet.
- Learn to keep a cool head, and know well ahead of time how you respond to stress so that you can better manage level-headed negotiations. Sometimes talks can get heated, but as the old saying goes, level heads prevail.
- Learn to keep everyone’s interests at heart. Reject the "zero-sum” fallacy that dictates that in order to get what you need for your client, the other side has to lose something. It’s entirely possible to serve your client to the full extent of your abilities while offering concessions to the party on the other side of the negotiating table. If you can recognize the importance of both parties walking away satisfied, you’re already well on your way to becoming a one-of-a-kind commercial real estate negotiator.
What strategies have you used? Share Below.