Episode 043 – Unlocking Better Lease Terms: A Chat with Kelly Cunningham of Your Leasing Co

Commercial Lease Negotiation: What Massage Therapists Need to Know Before They Sign

Signing or renewing a commercial lease can feel like a necessary step in building a practice. You find a room or clinic that feels right, the agent sends a document, and there is a quiet pressure to keep the process moving.

In this episode, Jackie and David speak with Kelly Cunningham, Managing Director and Co-Founder of Your Leasing Co, about the parts of commercial leasing that small business owners often overlook. Kelly’s work centres on representing commercial tenants in lease negotiations, whether they are renewing, relocating or looking for a new premises.

For massage therapists and bodyworkers, a lease is rarely just a property decision. It affects overheads, flexibility, how secure you feel in your practice, and the profitability of the business you have worked hard to build. The document may be long and technical, but the commitments inside it can run for years.

Kelly’s central message is straightforward: a lease presented by a landlord or agent is not the finished deal. It is a document for consideration.

A lease is not something to sign on the spot

Many tenants receive a lease shortly before a meeting, then find themselves handed a pen and expected to sign. Jackie described the feeling clearly: even where a copy has arrived by email, how do you know the document put in front of you is exactly the same one?

Kelly’s advice is to slow the process down. If a landlord or agent presents a lease, it is reasonable to say:

“Thanks very much for that. I’ll review it with my consultants and come back to you soon.”

This creates space to read the document properly and decide who should review it with you. That may be a lawyer, a leasing specialist or another appropriate adviser. The point is not to create conflict. It is to make sure the written agreement reflects what has actually been discussed.

Small business owners can be particularly vulnerable to urgency. Opening a new clinic, expanding or moving premises is exciting. It is easy to focus on treatment-room layout, signage and the work ahead, rather than the fine print. Yet a three- or five-year lease can become difficult and costly if an agreed condition never made it into the final document.

For example, a tenant may believe they were promised a particular contribution, service or arrangement. If it is not included in the lease, it may be hard to rely on later. As Kelly puts it, “the devil’s in the detail”.

Keep a fully signed copy of the lease

Once the agreement has been signed, keep a complete copy of the final document. Kelly explained that a delay can occur where a lease is registered on the property title, as that process can take several months. But a tenant should still follow up if they have not received the fully executed version.

This becomes particularly useful if the property changes hands, the managing agent changes, or there is disagreement about an obligation later in the lease term. A business owner needs to be able to refer to the actual agreement signed by both parties, not rely on an old email thread or an unsigned draft.

It is sensible to keep the signed lease with related documents, including correspondence about incentives, approved works, rent reviews and options. A well-organised lease file is not glamorous, but it is far easier to consult than a vague recollection from several years earlier.

Start lease discussions well before expiry

Time is one of the strongest negotiating tools available to a tenant. Kelly recommends beginning renewal discussions six to eight months before a lease expires.

Leaving the process until the final weeks shifts the balance towards the landlord. The tenant may have no practical time to compare locations, obtain advice, negotiate terms or plan a move. The landlord knows that a business with an approaching expiry date may feel forced to accept what is offered.

This is especially important where the lease contains an option. An option is not simply a chance to continue in the space. It may have a defined period in which the tenant must act.

Kelly’s warning is clear: establish the rent before exercising the option. One of the common mistakes she sees is a tenant exercising an option first, then asking what rent will apply. By that point, their negotiating position can be weaker.

Starting early allows for a calmer sequence:

• confirm the key dates in the existing lease;
• ask the landlord what they are proposing;
• investigate comparable premises and rents;
• consider whether staying remains the best commercial decision; and
• negotiate before committing.

For a practitioner in a busy clinic, this work is unlikely to happen in a spare afternoon. Put the review date in the calendar well ahead of time.

Use market rent, not the landlord’s opening figure

A landlord’s proposed rent increase is an opening position, not a benchmark for what a tenant should pay.

Kelly described a familiar pattern. A tenant paying $50,000 receives a proposal for $55,000, negotiates it down to $53,000 and feels they have saved $2,000. But if the market rent for a comparable tenancy is $40,000, the negotiation began from the wrong number.

The more useful starting point is the value of a comparable vacant, unimproved space in the local market. Look at other premises of similar size, condition and location. Consider recent leasing activity where available. The aim is not to find an identical room, but to establish a credible range.

For massage therapists, comparable premises may include allied health rooms, professional suites or small retail-facing spaces, depending on the practice model. A treatment business built around appointments has different needs from a café or high-footfall retailer. Even so, location, accessibility, condition, parking and local demand still affect the rental value.

This is also where a tenant representative can offer a useful outside view. If you have been in one clinic for 10 or 15 years, annual increases can become normal simply because they arrive every year. Normal is not necessarily competitive.

Consider relocation as part of every renewal

Staying put can be the right choice. A familiar location, established client base and low disruption have real value. But remaining should be a decision, not an assumption.

Kelly encourages tenants to examine alternatives whenever renewal approaches. A nearby vacant tenancy may offer a lower rent, more favourable incentives or a better fit for the next stage of the business. Even if you ultimately stay, having a genuine alternative can strengthen the conversation with the current landlord.

She shared an example of a business asked to give back part of its existing tenancy without a corresponding reduction in rent. A comparable vacant space elsewhere in the same centre was being offered for substantially less. The business relocated across the walkway, received a new fit-out funded by the landlord and reduced its annual rent significantly.

Another example involved an appointment-based speech therapy practice that had occupied the same location for many years. The owners were concerned about losing clients if they moved. They relocated one suburb away, retained their clients and reduced rent from $180,000 to $65,000 per year.

A massage practice may not face numbers on that scale, but the principle is the same. Clients who book appointments can often adapt to a well-managed move, particularly when communication is clear and the new location remains accessible. The possible costs of relocation, including fit-out, downtime and client communication, should be weighed against the ongoing cost of an uncompetitive lease.

A vacant premises can also create leverage. Landlords are often motivated to secure a tenant for an empty space, and may have greater capacity to offer rent-free periods, fit-out contributions or other incentives than they would for an existing tenant who appears unlikely to leave.

Be cautious about personal guarantees

One issue Kelly highlights is the personal guarantee.

A personal guarantee can allow a landlord to pursue a tenant’s personal assets for unpaid rent or costs arising from the tenancy. It is a serious commitment, yet some business owners sign one without fully understanding the exposure it creates.

Kelly’s position is that a personal guarantee is not automatically required simply because an agent says every lease has one. She suggests that a bank guarantee or a security deposit equivalent to three months’ rent may be alternatives, depending on the situation.

This is not an area for casual assumptions. If a personal guarantee is included in a lease, understand exactly what it means, how long it applies and whether it can be negotiated out. Taking advice before signing is far easier than trying to unwind a guarantee after a business or personal circumstance changes.

Negotiate firmly without turning it into a fight

Commercial lease negotiation can feel personal, particularly when the practice is your livelihood and you have invested heavily in the space. But a lease negotiation does not need to become hostile.

Kelly’s approach is to protect the tenant’s interests while preserving the working relationship with the landlord. A landlord has commercial objectives. So does the tenant. The work is to find terms that are workable for both parties.

Having an adviser involved can help remove some of the emotion. It can also make the conversation more practical. Rather than simply rejecting a proposal, the tenant can return with considered questions, comparable evidence and alternative options.

Everything in a lease may not be negotiable, but more may be open to discussion than a first-time tenant expects. Rent, rent-review mechanisms, incentives, fit-out contributions, guarantees and other conditions can all affect the final arrangement.

The most useful first step is often the simplest: do not sign until you understand what you are agreeing to.

A commercial lease is a substantial business commitment. Give it the same attention you would give any other decision that could affect your income, flexibility and future options for years to come.

To hear Jackie and Kelly Cunningham’s full discussion on commercial lease negotiation, listen to Episode 043 of Folding Towels wherever you get your podcasts.