Managing in the Red Zone

November 12, 2024 • As the topsy-turvy COVID and post-COVID eras move into the rearview mirror, our proprietary Black Box strategy for managing the legal leasing process remains essential.

Originally published in December 2014, it’s the blueprint for landlords, tenants, brokers, and attorneys who want to consistently achieve best-in-class, high-performance commercial leasing results.

Please enjoy this republication of Part Four of our series: Opening the Black Box: Managing in the Red Zone.

In the Black Box, vigilance is essential in the red zone, when the lease is almost final but could still be derailed.

Close But Yet So Far

We bring our focus to the red zone: that point in the negotiations when just about all the issues have been resolved and execution seems imminent. A signed lease is tantalizingly close, but possibly still so far away. Poor management of the legal leasing process at this point can have radical implications.

When lease negotiations reach this red zone, I maintain a heightened level of vigilance to ensure the lease makes it over the finish line. If I let down my guard or take my eye off the ball, what looks like it will be a win can easily turn into a loss.

Moments of Truth

Here are some examples of what has happened in the red zone, moments of truth that can make or break the deal. The tenant is a franchisee and “remembers” that the landlord needs to enter into a tri-party agreement giving the franchisor leasehold rights that threaten the deal; the bank issuing the letter of credit 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. This is the time for everyone to mobilize and catapult the lease over that finish line.

Strategies for Success

Here are some of the strategies we use in the red zone to make sure that moments of truth are precursors to success.

Speed. We never lose sight of the fact that time kills deals, especially when we’re in the red zone.

Teamwork. We take full advantage of the good working relationships we’ve developed with the attorney and principal on the other side and make sure everyone is focused and in action.

Coaching. We work very closely with our client to devise and execute a plan of action to get the deal done.

Communication. We make sure everyone is informed about the often shifting nuances and tenor of the negotiations as we make our way forward.

Wrapping Up

Thank you for letting us share our Black Box strategies for achieving best-in-class, high-performance commercial leasing results.

We look forward to working with many of you as we continue to toil away in the Black Box of the legal leasing process.

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View all four parts of the Black Box series here on our News + Views page.