This should have been an easy deal. A simple office expansion by a fast-growing company into a floor of their building that had been vacant for nearly a decade. The letter of intent was signed in less than 30 days – then there was a hiccup.
The building was being sold. An investor who toyed with buying the building for 6 months got their act together and made an offer for a quick close, and the landlord went for it. After that, although the new landlord is friendly, and said he is motivated to make the deal – it drags out for another six months while the investor consistently misses deadlines, over promise and under delivered and ultimately renegotiated terms in the final hour. Only through consistent and persistent action on the part of the tenant representative – calling the investor all hours of the day and night – did the deal ultimately get done. Now there appears to be a problem with the investor approving plans for construction! The brokers have never been paid and the occupancy date is nine months behind schedule!
Andrew Coleman in A Dictionary of Psychology defines emotional intelligence as “the ability to monitor one’s own and other people’s emotions to discriminate between different emotions and to use emotional information to guide thinking and behavior.” The Landlord was experienced, emotionally mature and excellent at reading the tenant’s representative as one who was attempting to build trust so that his client could have a good long-term relationship. The Landlord used the representative’s conciliatory tone to manipulate the situation to win unnecessary concessions.
So, what is the lesson here?
Be aware of the limitations of being a “good-guy”: Often it is in the DNA of a broker to accept a lot of responsibility for how the deal turns-out for their clients. Most successful brokers are friendly, energetic team players with their tenant clients, and the landlord; but in situations like the one above, attempts to be “good-guys” can backfire.
Take time off to prepare, then deliver a firm “No”: It has been proven by Harvard’s Program on Negotiation that angry counterparts can win big concessions. But, you have to use this tactic sparingly. We have found that it is useful when we are arguing on a point of “fairness” and we are well prepared with concrete details to make a point.
Don’t be a Patsy: Poor Patsy – I am sure that he was just trying to create rapport so that there was a creative deal struck between both sides. If Patsy didn’t quit, I bet he learned his lesson and understood the limits of being emotionally intelligent. Ole’ Patsy knows that his cool deal making skills are helpful to a point, but sometimes you have to put your foot down.
To some extent the emotionally mature negotiator is able to lasso and hogtie that inner cowboy and pin him to the ground. But there are other times that it is effective to express anger with the situation, not the person, to bring negotiations to a head. Raising the stakes is only effective if you are prepared with concrete facts and credible information. Otherwise, if you don’t have a lasso and you’ve got lousy aim, try these more mundane approaches.
- Focus on teamwork with you agents and attorneys.
- Focus on the long-term goals and remind the parties that this will not be the only time that the agreement is pulled-out to be negotiated – perhaps there will be lease expansions in the future.
- Don’t resist pursuing certain options because they promise to be time consuming. If you would like to see our Prepared to Win-Win Commercial Lease Negotiation Worksheet, check it out at http://www.GoForBrokerBook.com