“The Code is more what you’d call ‘guidelines’ than actual rules.” 
​- Captain Barbossa

The term “parlay” in Pirates of the Caribbean and “asking rents” in commercial real estate have different literal meanings, but there are interesting parallels between them when considering their strategic use in negotiations. 

“Parlay” in Pirates of the Caribbean:

Definition: In the movie, “parlay” refers to a formal negotiation or truce between pirates, allowing for peaceful discussions under a temporary ceasefire. It’s a pirate’s right to request a conference with their adversaries without fear of harm.

Use: Parlay is invoked as a strategic tool, often used to stall, negotiate better terms, or to prevent immediate violence. It’s a way to reset the terms of engagement, opening a dialogue between parties who would otherwise be in conflict.

“Asking Rents” in Commercial Real Estate:

Definition: Asking rent is the initial price per square foot that a landlord or property owner sets for leasing space in a commercial property. It is the price they propose during the early stages of negotiation.

Use: Asking rent is rarely the final rental price. It’s a starting point in negotiations, allowing potential tenants and their broker to discuss and potentially offer counter terms based on market conditions, tenant demand, and property value. Tenants can then negotiate for concessions, lower rent, or better terms.

Comparing Parlay and Asking Rents

Starting Point for Negotiation:
In Pirates of the Caribbean, “parlay” creates a starting point for discussions that could lead to mutual agreements or compromises. Similarly, in commercial real estate, asking rents serve as the initial offer from which negotiations begin. Both create a formalized opportunity for dialogue and negotiation.

Not Final Terms:
Parlay does not guarantee a peaceful resolution or fair terms—it simply opens the door to discussion. Likewise, asking rents are not the final terms of the deal; they are meant to be negotiated based on factors like tenant needs, market conditions, and lease length.

Strategic Leverage:
Pirates use parlay as a way to buy time, gain leverage, or force the opposing side into a discussion when direct confrontation may not be in their favor. In real estate, landlords set asking rents higher than what they expect to finalize, giving them leverage to negotiate downward while still meeting their financial goals.

Temporary Arrangement:
Parlay only temporarily halts conflict, and its results can vary. Similarly, the asking rent is a temporary marker—it’s flexible and often adjusts based on market demand, concessions, or tenant requirements.

Conclusion:
 In both cases, parlay and asking rents serve as tools for initiating negotiations and setting the stage for further discussions. Neither represents final terms but rather an invitation to engage in a conversation where both sides can potentially alter the outcome. Both terms highlight the importance of negotiation in shaping the final agreement—whether it’s between pirates or commercial tenants and landlords.

About CroninCRE:
At CroninCRE, we exclusively represent tenants. Never landlords. We provide real estate advocacy negotiating on our client’s behalf without conflict of interest.
 

Imagine navigating the streets of post-pandemic San Francisco, eager to find the perfect office space that suits your needs and budget. Armed with newfound leverage as a tenant in a market rebalancing post-pandemic, you're ready to seize the opportunity and return to the office. Yet, as you delve into the market, you encounter a puzzling phenomenon – landlords and their brokers keeping the asking rent undisclosed.
 
But why do they do this? What's the rationale behind concealing the starting point of lease rates, leaving tenants in the dark even when they hold the upper hand?
 
If you asked a landlord’s broker why they don’t quote asking rates, most will tell you it's because they don’t know how much tenant improvements (TIs) will cost for any given tenant. That's not a very honest response because nearly all landlords have market driven TI allowances factored into rental rates. Why is it that unknown TI costs don't prevent other landlords and brokers from quoting asking rates?

Traditionally, asking rates have served as essential guideposts for both tenants and landlords, offering clarity and efficiency in the leasing process. However, in today's market, where tenants wield increased bargaining power, withholding asking rates has become a strategic choice for some landlords and brokers. Withheld rents are a good way for the brokerages and the landlords to pump up the rates they get.
 
Enter the realm of "Asking Rent: Withheld." In post-pandemic markets, where tenants hold more sway than before, this practice remains more prevalent than ever. It's a playground where tenants, despite their newfound power, are left to navigate a market with limited information.
 
In such a landscape, seeking the guidance of a tenant representative emerges as a practical solution. Tenant representatives specialize in navigating the complexities of the real estate market, advocating for tenants' interests, and ensuring transparency throughout the leasing process.
 
Armed with knowledge and a trusted advisor by your side, you can navigate the intricacies of the commercial real estate market with confidence. In a post-pandemic environment where transparency is paramount, leveraging professional guidance becomes essential for leveraging your newfound power as a tenant and securing the ideal space for your business.

At CroninCRE we are a tenant-focused, conflict-free commercial real estate advisory that maximize your leverage in every transaction. In the world of commercial real estate, fortune favors the informed and empowered tenant.

As tenant representatives we are often asked by our clients what the difference is between a Request for Proposal (RFP) and a Letter of Intent (LOI). 
 
Reduce Misunderstandings
The RFP and LOI are very similar in that both are merely a discussion of some of the business terms and conditions that a tenant and landlord will need to reach agreement on in advance of executing a commercial lease agreement. The terms and conditions may include but not be limited to: 

• Base Rent (including, escalation, concessions, free rent, and pass-through expenses)
• Base Year
• Term
• Commencement Date
• Delivery Date
• Security Deposit
• Tenant Improvement Allowance
• Assignment and Subletting
• Renewal options
• Signage
• Parking
• Other conditions

RFPs and LOIs are non-binding and will typically go through multiple rounds of back-and-forth negotiations. Upon agreement of terms, the landlord will present a draft of a formal lease agreement to memorialize the transaction. Only a fully executed lease, reviewed, and approved by both parties’ management and legal counsel becomes binding. The benefit of both the RFP and LOI is the reduction of misunderstandings between parties.
 
Maximize Negotiating Leverage 
RFPs are submitted by tenant brokers on behalf of tenants and are often presented in the earlier stages of lease negotiations. LOIs tend to be submitted or exchanged by either tenants or landlords and their brokers closer to final lease negotiation. It is not uncommon for a tenant broker to submit an RFP to a landlord, and the listing broker to respond by presenting an LOI as their response.
​
The most significant difference is that a Request for Proposal is a signal from the tenant to the landlord you are considering multiple alternatives and are asking them to put forth their best offer. Submitting RFPs and getting proposals from a select few number of buildings will give you an “apples-to-apples” comparison of alternatives and help you negotiate the most competitive terms and conditions possible with the landlord. There is no negotiation leverage without options and the ability to walk. 
​
Unlike the RFP, when a tenant initiates a Letter of Intent, it is a declaration that the tenant intends to enter into a lease with the landlord for their specific premises. Landlords know that nearly all tenants that initiate lease negotiations by submitting a Letter of Intent have vetted their short list and will end up leasing their space.  
 
As tenant representatives we represent commercial tenants only. Never landlords. We utilize RFPs to develop a Plan B in case we are unable to work out an agreement with the landlord. If you don’t put landlords on notice that you are considering other options by submitting a Request for Proposal, you’ve lost the ability to maximize your negotiating leverage.