Lawrence BacowTwo-party negotiation between a shopping center developer and a prospective anchor tenant over the terms of the proposed lease's "use, assignment, and subletting" clause
Discount Marketplace, one of the largest discount soft goods retailer in the country, has presented its standard lease to Hawkins Development a regional real estate developer. The developer found most of the lease acceptable, after modifications of some provisions. However, negotiations are at an apparent impasse over the “use, assignment, and subletting” clause proposed by Discount Marketplace. In-house leasing representatives from both parties have been asked to resolve this dispute and to finalize the lease.
This exercise is designed as a one-on-one negotiation but also works well with teams of two representing each side. Individual preparation requires about 15 minutes, whereas teams of two will need slightly more time to coordinate a strategy. The negotiation should take from 20-35 minutes and a productive debriefing can take an hour or more.
The Negotiation of a Commercial Lease video is based on this simulation, and is a useful supplemental tool for debriefing. Instructors also may wish to view the first video in the Program on Negotiation’s Negotiation Pedagogy Video Series (Professor Michael Wheeler, Harvard Business School), which depicts an experienced negotiation professor using the Negotiation of a Commercial Lease video in an actual Harvard Business School class.
- Relationships are important in this case. A long-term lease means a long-term relationship; which will enhance a good working rapport.
- This case is a good vehicle for exploring each other’s interests and designing creative options to solve the leasing problem.
- Discussions should focus on the potential for transforming an apparent zero-sum problem (in which the developer wants use restrictions and the prospective tenant wants a free hand) to one in which joint gain is created. Participants should be encouraged to relate the substance of their agreements to the process by which they uncovered interests and generated options.
For all parties:
- General Information
Confidential Instructions for:
- Discount Marketplace
- Hawkins Development
- All of the Above
BATNA; Closure; Communication; Interests, dovetailing; Lawyering; Legitimacy; Relationship; Risk aversion; Risk perception; Time constraints; Trust
Negotiation Pedagogy Video Series, Part I
This unscripted video, available separately, shows PON faculty member Michael Wheeler running and debriefing the “Discount Marketplace and Hawkins Development” exercise, interspersed with excerpts from a post-workshop interview with the instructor.
Order the video here.
Discount Marketplace and Hawkins Development Attributes
- Time required:
- 30 minutes – 1 hour
- Number of participants:
- Teams involved:
- Agent present:
- Neutral third party present:
- Teaching notes available:
- Non-English version available:
- German, Spanish
PON Teaching Negotiation Resource Center
Soft copy vs. hard copy
You may order this role simulation in either soft copy (electronic) or hard copy (paper) format. If you select the soft copy option, you will receive an e-mail with a URL (website address) from which you may download an electronic file in Adobe Acrobat PDF format. You will have one week to download your materials from when you receive the email. You are then only authorized to use, print, or share the materials as many times as the number of copies you purchase. The TNRC charges for use of this simulation on a per-participant basis. Therefore, you must purchase a separate copy of this simulation for each person who will be participating, regardless of the number of roles in the simulation. You will only receive a link to one electronic file, which includes all general instructions, confidential instructions, and any teaching notes for the simulation. You should separate out the instructions before distributing to participants.
If you select the hard copy option, you will receive paper copies of this role simulation via the shipping method you select.
For additional information about the soft copy option, please visit our FAQ section, or contact the PON Teaching Negotiation Resource Center at firstname.lastname@example.org or 800-258-4406 (within the U.S.) or 301-528-2676 (outside the U.S.).
Please note: At the present time, Teaching Negotiation Resource Center soft copies are compatible with the following versions of the Adobe Acrobat Reader: English, German, French, Spanish, Swedish, Portuguese, Japanese, and Korean. If you have a different version of the Acrobat Reader, you may wish to download one of these at http://www.adobe.com/products/acrobat/readstep2.html, or contact the PON Teaching Negotiation Resource Center at email@example.com, 800-258-4406 (within the U.S.), or 301-528-2676 (outside the U.S.) for further assistance. This restriction does not apply to the freely available Teacher’s Package Review Copies.
Ordering a single copy for review
If you wish to review the materials for a particular role simulation to decide whether you’d like to use it, a PDF, or soft copy, version of the Teacher’s Package for the simulation is available as a free download from the description page of most role simulations and case studies. All Teacher’s Packages include copies of all participant materials. In addition, some Teacher’s Packages (but not all) include additional teaching materials such as teaching notes or overhead masters.
Ordering copies for multiple participants
To order multiple copies of a role simulation for use in a course or workshop, simply enter the total number of participants in the box next to “Quantity.” There is no need to calculate how many of each role is required.
If you are ordering hard copies, the Teaching Negotiation Resource Center will calculate the appropriate numbers of each role to provide, based on the total number of participants. For example, if you wish to order a 2-party role simulation for use with a class of 30 students, you would enter “30” in the box next to “Quantity.” You then would receive 15 copies of one role and 15 copies of the other role, for use with your 30 participants. As another example, if you ordered 30 participant copies of a 6-party role simulation, you would receive 5 copies of each role.
In the event that the number of participant copies you order is not evenly divisible by the number of roles in the simulation, you will receive extra copies of one or more roles. Participants receiving the extra roles may partner with other participants playing the same role, thus negotiating as a team. So, for instance, if you ordered 31 copies of a 2-party role simulation, you would receive 15 copies of the first role and 16 copies of the second role. One of the participants playing the second role would partner with another participant playing that same role, and the two would negotiate as a team.