What is BATNA? No, it’s not the name of Marvel’s latest movie blockbuster…but it certainly is a powerful weapon for you to use in your commercial real estate negotiations.
BATNA stands for Best Alternative to a Negotiated Agreement, a term first coined by Roger Fisher and William Ury, of the Harvard Program on Negotiation, in their 1981 bestseller, Getting to Yes: Negotiating Without Giving In. Another way of looking at BATNA is this: it is the best course of action to take if your negotiations fail and an agreement can’t be reached.
BATNA is often considered a point of leverage in a negotiation. Knowing and having a BATNA is something that a negotiator can overlook, but is extremely valuable when that time is invested. In Getting to Yes, Ury and Fisher give three suggestions to accomplishing a strong BATNA (Fisher, Ury& Patton 1991, p.103):
1) Inventing a list of actions that you might conceivably take if no agreement is reached.
2) Converting some of the more promising ideas into practical alternatives.
3) Selecting, tentatively, the best one alternative that seems best.
You are probably wondering how BATNA comes into play in a commercial real estate negotiation? In commercial real estate, inexperienced negotiators can throw away thousands of dollars and experience incredible amounts of anguish in fear of “losing” the negotiation. Buyers, might even endure months or years of less than favorable conditions, like a lack of parking or being overcrowded at their current office property, rather than pay more than they think the new office property is worth. Sellers have rejected offers, or refused to lower their list price, without considering how much it costs them to hold onto the unoccupied property. In commercial real estate, it is imperative that the buyer and seller have very clear ideas of what ALL of the costs will be if you don’t reach the intended agreement, monetary and otherwise.
Menlo Commercial Real Estate Phoenix has agents with many years of experience in commercial real estate negotiations to assist you. Let us help you be a Superhero at the negotiation table!