Office Rental Negotiation

Landlord

You are the developer, owner, and landlord of Corporate Court, a 40-unit office complex in Chapel Hill. You originally built Corporate
Court 15 years ago and have maintained an average monthly occupancy rate of 93%. You are proud to run such a successful
business.

One of your long term tenants recently decided to retire and give up their lease. The vacated office is a ground-floor corner unit in
Building 3. It is easily accessible from the parking lot, but also far enough from foot traffic to ensure privacy. The retiring tenant used
the office to see patients in her psychotherapy practice. It's a perfect office for a sole proprietorship or a small business.
You are meeting today with the owner of Executive MatchMaker, a boutique consulting firm that helps executives find new jobs. The
owner of Executive MatchMaker toured the vacant office recently and said that it meets all of their needs. You scheduled this
meeting to negotiate the terms of a potential lease.

You have identified four issues that you want to discuss during the negotiation: monthly rent, start date, sublet policy, and office
cleaning policy. Your negotiation is not complete until you reach an agreement on all four of these issues.

As part of your negotiation preparation, you created a points schedule that reflects your preferences. Your goal is to reach an
agreement that provides you with as many points as possible. THE MORE POINTS YOU EARN, THE BETTER YOUR
AGREEMENT.

Should you and the prospective tenant fail to reach an agreement, you will lease the office to Dr. R. S. Townsend, a psychiatrist
whom you met at the country club. Dr. Townsend has offered you a deal worth 4,350 points.

Monthly Rent

Based on your research, a reasonable monthly rent for Chapel Hill is approximately $2,200 per month. Charging a higher rent gives
you more money for business.

Monthly Rent Options Points

A. $1,600 per month 300

B. $1,800 per month 450
C. $2,000 per month 600
D. $2,200 per month 750
E. $2,400 per month 900
Start Date

The start date of the lease refers to the day that a new tenant begins paying rent. Although your current tenant has already vacated
the office, a later start date would give you more time to make repairs. Starting the lease too soon rush the repairs and increase long-
term costs.

Start Date Options Points

A. Next week 850

B. Next month 1,025
C. Two months from now 1,200
D. Three months from now 1,375
E. Four months from now 1,550

Sublet Policy

Office leases often include a clause that describes the circumstances under which the tenant can sublet the office to someone else in
their absence. You would like to reduce subletting. Subletting an office is a security problem for the other tenants in the building.
Points
Sublet Policy Options

A. No sublets allowed 1,800

B. Sublets allowed with two months notice 1,400
C. Sublets allowed with one month's notice 1,000
D. Sublets allowed with one week's notice 600
E. Sublets allowed with no advance notice 200

Office Cleaning Policy

Offices get dirty. A landlord-provided cleaning service can keep everything looking great and well maintained. You can keep costs
down by paying for no cleanings. The tenant can clean the office themselves or hire their own cleaners.

Office Cleaning Policy Options Points

A. No cleanings 1,100
B. One deep clean per year 825
C. Quarterly cleanings 550
D. Monthly cleanings 275
E. Biweeky cleanings 0