It may be an incredible time for acquiring commercial real estate in Worcester, MA but that doesn’t mean that negotiating and getting the deal you want is always a breeze.
Despite the presence of attractive prices, commercial real estate properties in great locations and appetizing cap rates or even the need for some property owners to sell, increased competition and ego can often be a roadblock to locking in the best terms.
So is winning at commercial real estate negotiation all just about hard work, slick sales skills, having the right connections or is it something else?
Piranhas, a Donkey and a Recon Mission
Volumes have been written on negotiating and how to win at it. Some may believe that being a great negotiator is a natural born talent but that is rarely the case or the whole story.
Some high profile attorneys have authored books, suggesting tips like feeding piranhas in their office during negotiations to make an impression on their opponents. Fun, but perhaps alligators or sharks might be more fruitful if you really must resort to mafia style techniques.
The CCIM Institute recently published an article by a commercial real estate agent suggesting the key to winning was actually ‘donkey-work’ or grinding away at it. This certainly may have been true in his case given it took him a year to negotiate a lease.
However, those investors looking to make fast moves to take advantage of current conditions and opportunities and want to “make and offer they can’t refuse” without risking jail time might find a better approach from simply using another approach to intelligence.
The Key to a Winning Negotiating Strategy
Perhaps the real secret to being a successful negotiator and crushing it when it comes to landing the best deals on New England investment property is all about intelligence.
This isn’t about IQ and it can be applied whether looking at industrial real estate or getting into office leasing or multifamily rentals.
It is a twofold strategy for making winning offers. The first is honing your ‘interpersonal intelligence’ to better understand the other party’s needs, fear and desires including perceived financial or legal restrictions and ego.
The second part is doing your due diligence, investigating and gathering intel on the factors which could be affecting the other side’s position.
Armed with this information you can serve up more of what the seller or their representative needs and wants and use it to negotiate to get more of what you want too.
Perhaps price isn’t that important to them at all. Maybe it is speed and a fast closing that they need. Or maybe they believe they are stuck with financial penalties to paying off a loan or have hefty code violations to be satisfied which can actually be negotiated down to nothing, creating hundreds of thousands of extra dollars in the deal.
Today if you hit a standoff in negotiations due to logistics and debt structuring perhaps get your commercial real estate lender involved and if they are hungry enough and the income and value is there they will find a creative solution to make it happen.