28 Jun Your Landlord is Your Most Important Business Partner
One of my former colleagues once told me, “your landlord is your business partner.” It’s true, but I want to modify it a bit. At least if you’re a solo location, your landlord is probably your most important business partner.
I remember the days when I felt like I was doing something dirty by opening a coworking space. Traditional real estate folks didn’t understand coworking yet (many still don’t). They had strict sublease language in the lease agreement. They didn’t like it when you rented space from them and turned around to make money with the space being a large part of the product. It took a long time to find building owners that would even be okay with the idea. And once we did, they didn’t understand the needs and the nuances of a coworking business.
The truth is unless you purchase your building you are not in complete control of your space.
A friend of mine recently received a note from his landlord that said the building will no longer allow dogs on the premises. Supposedly some of the other tenants were complaining so the dogs had to go. Many of my friend’s members bring their dogs to work on occasion, so the space and members will have to adjust. This may not sound like a big deal, but I have had members join solely because they could bring their dogs to work; it’s just a deal breaker for some people.
Another friend of mine is having trouble throwing events because the previous tenant partied a little too hard in the space. The landlord is wary of more events because they comparing my friend to the old tenant. For a coworking space, this could spell doom. Many of us consider events part of the lifeblood of membership growth, so this is much bigger issue than the dog problem.
When these conflicts arise with your landlord your gut tightens up and you immediately go into fight or flight mode. This is because you’ve made too many assumptions and haven’t built a relationship with your landlord, which means you really don’t understand him/her, and that’s a huge mistake. You should know your landlords’ values, beliefs, and non-negotiables.
In both of the cases above, it’s clear the landlords have their own views of how an office space ought to function. These views are something you need to accept if you’re going into business with somebody. Think about the limitations in services and amenities that could result from a values conflict. Think about potential disagreements that could happen because of your business model and their non-negotiables. How you can address these issues up front?
To build a great partnership with your landlord it’s important to start off on the right foot, then build from there. Don’t be eager to jump into a beautiful space at a good rate without considering the landlord’s demeanor, opinion, and understanding of your business. It’s likely you’ll be in business with this person for a long time.
Ask yourself these questions. Are you in alignment with your landlord? Does this person understand your business? Are they excited about it or wary of it? Do they share many of your values? Are they traditional or forward thinking?
Once you understand them, it’s important to be a good business partner yourself. Your landlord is always concerned about two big things: liability and occupancy. If you actively seek ways to reduce your landlord’s liability and increase their occupancy, you’ll be their best friend. Sorry to say this probably means no rooftop parties.
Regardless of how accommodating your landlord is or how great your relationship is, you must get your must-haves in the lease. The lease needs to explicitly allow you to throw after-hours events, allow non-tenants in the space, and whatever else is important to you. A handshake is not enough to protect you should another, bigger tenant complain about something that’s important to you. After all, business is business, and your landlord is going to side with the group sending him the biggest checks.
So yes, you should absolutely have a great relationship with your landlord and you should try as hard as possible to find one that you will work well with, but don’t rely on these things. At the end of the day you need to protect your business and your members. Get it in writing so that, down the line, you don’t end up in an emotionally charged match of he-said-she-said.