BARR Credit Services is the successor of Tucson-headquartered Anderson, Randall & Richards Inc., a global commercial collection company that had been in businesses since 1998. It merged with The Bessenbacher Co. in 2016 to become a leading provider of commercial debt recovery, collections and credit services.
An earlier version of the firm, Randall and Richards Inc., contacted Commercial Real Estate Group of Tucson when the landlord of its office lease on 10,000 square feet proposed to renew the contract for the same rental rate it was offering to new tenants. The company sought leverage to negotiate a better lease.
CREG Tucson helped the company identify several locations that would meet its needs. Then the commercial real estate tenant rep issued requests for proposals (RFPs) to the short-listed candidates, including the current landlord. That created a bidding war for the client’s lease business.
CREG Tucson then represented the company in negotiating the new lease agreement.
- The client saved more than $150,000 over the term of the renewed lease, which reflected a below-market rental rate.
- A tenant improvement allowance provided for an employee breakroom, new carpet and repainting.
- The tenant won use of the full floor at a rate based on its occupancy of two-thirds of the floor.
- The building owner was required to make improvements to the common areas within 24 months after the effective date of the lease or the rental rate would drop to a below-market rate.
- The landlord eliminated an administrative fee, an above-market management fee and a fee for the monthly tenant appreciation luncheon. The lease included an at-market management fee.
RFPs are an effective way for landlords to vie for your business. It creates competition for your business, putting you in a strong position to get what you want out of a Tucson commercial lease.
I’ve even seen the client’s current landlord sweeten its lease renewal proposal in the hopes of retaining the tenant. That’s because it can cost a landlord more to lose a tenant than to provide a better deal to keep the tenant. That’s called the landlord difference analysis.
I encourage my clients to look around for new locations even if their first preference is to renew the current Tucson commercial lease. A landlord will often propose a lease renewal that doesn’t benefit you. But if the landlord knows you’re looking at options, a better deal may be offered.
Ask for CREG of Tucson’s “Relocation Guide” that details the steps to moving into a new space, from site search to reopening. Contact me for a complimentary consultation of your relocation needs, +1-520-299-3400.