Managing in the Red Zone
Our black box series on the legal leasing process concludes this month with part three of our secret sauce for managing what goes on during that often-dreaded and little-understood process.
Close But Yet So Far
This month we bring our focus to the red zone: that point in the negotiations where just about all the issues have been resolved and the lease is almost in final form. Close to the goal line, but not quite there yet.
Just as a questionable call in the red zone had disastrous consequences for the Seattle Seahawks in this year's Super Bowl, poor management of the legal leasing process when the lease is just about finalized can also have radical implications.
When lease negotiations reach the red zone, I rely on a heightened level of vigilance to make sure the lease makes it to the goal line and gets signed. I know that if I let down my guard or take my eye off the ball, what looks like a win can easily turn into a loss.
Pivot, Turn and Stay Flexible
Here are some examples of what can and has happened in the red zone: the tenant is a franchisee and “remembers” that the landlord needs to enter into an agreement giving the franchisor rights under the lease that could derail the deal; the bank issuing the letter of credit that will serve as a security deposit finally produces a draft that the landlord won't accept; the local jurisdiction issues restrictions that could have serious implications for the tenant’s permitted use. Time for everyone to mobilize to bring the lease into the end zone.
Strategies to Get Across the Goal Line
Here are the strategies that we rely on to get there. The first strategy is teamwork: we take full advantage of the good working relationship we’ve developed with the attorney and principal on the other side and make sure everyone is focused and in action. The second strategy is coaching: we work very closely with our client to devise and execute a winning plan of action. The third strategy is communication: we make sure everyone is informed about the nuances and tenor of the negotiations as we make our way forward. The fourth strategy is speed: we never lose sight of the fact that time kills deals, especially when they’re in the red zone.