THE VALUE OF A LEASE COMP

Using lease comps to assist a client in understanding where their lease economics should end up at the end of a negotiation needs to be reviewed. Prospective clients are told how important it is for a brokerage firm to have these details – and lots of them – to use in helping establish their negotiation end-point.

“Hogwash!”, I say.

Leverage is what establishes the bottom of the barrel economics with landlords not lease comps.

Every deal is unique, every client is unique. Reliance on lease comps is a poor substitute for applying a process that drives the outcome.  Even if you could standardize the transaction details, all a comp represents is a unique set of conditions in a single moment of time that cannot easily be generalized to any other deal.  You get all you need to know about where prices are going by looking at asking lease rate trends, applying a process to create leverage and letting the process drive the outcome.