As leases get more complicated and less standardized, and with properties rarely conforming from one to another, there are two documents that can hasten the successful negotiation process and achieve a document that can best align the goals of both landlord and tenant. In fact, negotiating a lease without a decent thoughtful letter of intent and a site plan that at least minimally details the basic design of the property is a good way to court stress that might be easily avoided.
Often, we negotiate leases adverse to a negotiator who has no idea what the property looks like. Is the property mixed-use? Who are the adjacent tenants? What is the parking configuration? Where is the pylon-monument sign(s)? Not knowing issues like these puts the negotiator at a clear disadvantage and more than likely ends up with a vanilla lease and not something more responsive. The site plan is exceedingly important.
Then there is the letter of intent, whether on the form of the landlord or the tenant, which in a perfect world explains how key business issues are to be handled. Be they co-tenancy or relocation, parking or additional rents, the art of the deal is often in the negotiation before it gets to the negotiator. In fact, long ago when there was much more lease conforming, many deals were generally the same and only the economics changed. And these leases, while generally workable in the mall environment, did not readily transfer to non-mall properties.
These issues are not landlord or tenant oriented, rather, when thoughtfully negotiated, predictable issues can be properly addressed. And, for sure, forgotten issues not in the LOI can be thoughtfully resolved. For instance, recently I worked on a lease where the tenant was adjacent to Shake Shack. The LOI did not deal with parking though it was clearly going to be an issue. A short conversation resolved the issue and the site plan was very useful.
More and more good leases, that is — leases that are balanced, reflect better craftsmanship land less conforming. And, hopefully, that allows the landlord and the tenant to have the best chance at a mutually positive relationship.
