A counter offer requires that you provide some details about your business, but the essence of the letter is to address important lease terms, such as lease length and renewal options or property improvements. Here are some tips on addressing some of these major points in a counter offer:
- Length of the Lease. Be very clear about the lease length terms you are asking for—a two-year lease with three, one-year options to renew is different than five straight years with no renewal options. Typically landlords prefer leases that are 2 years or longer, but it could not hurt to ask for a one-year lease. These often cost more and might have less renewal options, but at least you will not be locked into a space. Since there is a chance your business might outgrow the space, or might struggle and need to find a smaller space, you will want to leave yourself the option to get out of that space quickly, and remember that breaking a lease can be costly.
- Condition of the Property. Be clear as to whether you want the space as is, or if you need the landlord to repair or improve it first. If you are planning on doing renovations yourself, include this in a lease, because sometimes the landlord will give you an incentive or allowance for improving the property. If you aren’t sure if this particular landlord will do this, keep things open and offer to submit more details about your plans at a later time, after you hear more about considerations a landlord might offer for renovations.
- Occupancy Date. Tell the landlord when you want to take physical possession of the property, which could sometimes be a different date than the date you begin paying rent. You might even be able to negotiate a month of free rent by having your move-in date be a month before the date the lease actually begins.
Be sure that you know what you are getting yourself into with each of these terms so that you know how to address them in a counter offer!