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90 August 2015 | beautystorebusiness.com property manager a 'buy signal.' You've said you intend to stay. So why would the landlord do anything but try to raise your rent?" And on that topic of renovations: Avoid doing them too close to renewal time. "If you do a $100,000 renovation a year before your lease is up, you have just given a 'buy signal' that puts you in a bad negotiating position," says Willerton. "Time your renovations to be concurrent with, or just after, renewal time." TERMS AND INCREASES While five years is the norm for retail renewals, consider negotiating a longer term—say 10 years—if that's more to your liking. One benefit is that banks will only lend money for the length of your lease and you may prefer a longer-term loan. You may be able to swing more years if you have been a good tenant because long-term leases benefit landlords too. "Long-term leases are particularly valuable for landlords because they help improve the value of a commercial property," says Kahan. Conversely, you can negotiate a shorter-term lease if that's better for your business plan. And how about the rent-increase percentage? Anything you can do about that? "Most leases call for an increase of 3% per annum," says Willerton. It's important to negotiate for lower increases if you possibly can. "The big problem is that 3% compounded over 10 years is more like a 50% increase— not 30%." And that can be onerous. "There is a limit to how much retailers can raise prices—and it is generally not 3% per year. So the landlord is asking for something that the tenant cannot keep up with." You may be able to get a lower increase, says Wil- lerton. "Some landlords are more open to lesser increases, saying that they just want to match inflation, which is seldom over 3%." You should also try to negotiate terms that go beyond pricing. Remember: Any inducement that can be negotiated on a new lease can be negotiated on a renewal. Maybe you can get some site improvements such as better lighting, a new paint job or more attractive signage. And how about some free rent, a refund of your security deposit or some "tenant allowance"—money from the landlord to help build out your space? Or how about eliminating the personal guaranty? How about removing some clauses that you found unpalatable? Renewal time is the right time to put these and similar items in play. GET HELP As the comments in this article suggest, negotiating a favorable lease renewal is far more complicated than just signing off on a renewal option. It will often pay to have some outside assistance. Consider using a tenant broker. Bear in mind that a broker costs nothing to use because his payment comes in the form of commis- sion splits with landlord brokers. At the very least he can get you a fair price. "A qualified commercial broker can reference comps and help you figure out what you should be paying," says Kahan. You might also want to consider the services of an attorney who can be ben- eficial in other ways. "Brokers are there to minimize costs," says Himmelstein. "Attorneys are there to minimize risk." The broker will make sure your lease terms are competitive with those of other leases in your vicinity; the attorney will rewrite clauses that might put you at risk. Together with your own investigations of the local marketplace, these professional services can help you turn lease-renewal time from a costly exigency into an oppor- tunity to bolster your bottom line. ■ Phillip M. Perry is a New York City- based freelance writer. • Unique design allows 360º spraying from any angle • Prime once and spray an even, continuous fne mist in a large spray pattern • Quietly delivers aerosol quality spray without any harmful propellants • Ultra versatile: works with water, alcohol, hairspray, tanning products, leave-in conditioners, treatment oils, and more! Flairosol Low minimums • All containers made in the USA • See our full line of products and custom printing services at www.ericoind.com 13777 Bee Street • Dallas, TX 75234 Toll Free: 800-223-7426 • Fax: 972-243-3005 The revolutionary, refillable fine-mist trigger spray bottle that moves with you! Experience the Erico Difference! The professional's choice for spray bottles, applicator bottles, and specialty containers Now you can spray a continuous fine mist stream in any direction from every angle with reduced hand fatigue! Order your Flairosol in one of these five designs or transparent, clear bottles.