Poor Negotiation Skills Damage Relationships

Negotiations Can Damage Relationships

Why negotiations can damage relationships—and how to fix them

We completed an office deal with a large accounting and consulting firm where we represented the landlord. 

The tenant was friendly and engaging, but the broker made it clear his job to fight “greedy landlords tooth and nail” for every concession. 

Sure enough, the broker ended up getting a good deal for the client.

However, soon after moving in, the tenant’s needs changed substantially. They had won a huge contract from a local bank and, as a result, they needed more money for expensive office upgrades and a new parking lot to house up to 150 more employees.

They tried to solve the problems by asking the landlord, who was still hurting from the bloodbath a year before, to make several lease concessions. 

But for the landlord, the bitter experience with the tenant’s broker (who had been paid and was long gone) was still fresh and top of mind. 

So the tenant had to fix their relationship with the landlord before any lease concessions would be made. This took a lot of time and resulted in a less-than-optimal outcome.

Which raises the question: Why would anyone start a relationship with a broker who has no interest in win-win approaches that would benefit the client long after the broker has been paid his commission?

Negotiating is an important part of any business relationship, especially in the art of real estate deal-making. 

Unfortunately, many people need better negotiation skills. This can lead to damaged relationships and lost time and money—especially when there is a lot on the table or there is a history of conflict. Then you face an even more complicated situation, with difficult dynamics and a higher chance of damaging personal and professional relationships.

So how do you handle negotiations so that you get what you want while protecting and even cultivating good relationships now and in the future?

“If you can’t describe what you are doing as a process, you don’t know what you’re doing.” 

-W. Edwards Deming

Well, at Cardinal Partners, we use The Prepared to Win-Win Negotiation Worksheet™ (it’s part of the Deal Canvas™ and we use it so much we simply refer to it as the P2WW). I created it after participating in Harvard’s Program on Negotiation, and it has just three steps: 

Step One: Clearly define your goals in the negotiation: Ask yourself, “What does success look like for me at the end of the negotiation?” Assume that the negotiation is over, the deal is done, and you are looking back over your progress. What would have had to happen for you to feel good about your outcomes?

Step Two: Develop an objective perspective about the other side: List the assumptions about the other side based on the level of importance. What are their alternatives? And how can you test all of these?

Step Three: Approach the other side tactfully: Here’s where you create value by trading resources, preferences, risk tolerances, and deadlines. You’ll summarize your relationship history and how it impacts decisions, list any other parties not at the table but interested in the negotiations, and “package” your communication for maximum power.

Before you begin any important negotiation, I suggest taking time to answer the following questions, like the ones I included in The Prepared to Win-Win Negotiation Worksheet™. These questions will help you understand your own interests and those of the other party, help you identify appealing alternatives, generate novel proposals, and stimulate collaborative discussion at the table.

Now, if you are an experienced leader and have negotiated many real estate deals in the past, you will say, “C’mon, I’m a proven negotiator; why do I need to learn more?” 

According to the research conducted at Harvard’s Program on Negotiation, the best negotiators prepare and calibrate their confidence accordingly. 

Or perhaps you think that you don’t have time to negotiate. I would respond, really? 

Occupancy costs may be one of the largest items on your financials! Are you sure you don’t have a few minutes to get ready to talk to your landlord? Again, the folks at Harvard have proven that those who do not prepare get taken advantage of.

By the way… if you wonder why you’re not getting this advice from your broker, it’s because they have not been to the Harvard Program on Negotiation. They are brokers who are interested in making a fee. Nothing wrong with that, as long as you, as their client, understand how they get paid and what is their motivation and that you are comfortable that your interests are aligned. If all you need is someone to execute a deal, most brokers are excellent at doing just that.

Cardinal is different. We have skin in the game. We are advisors. We know how important it is to be ready for negotiation so that we get the results that matter to our client, no matter how it may impact a broker’s fee. And we focus on educating our clients so that they are well-prepared before a key negotiation.

And if you follow our advice, follow the P2WW worksheet, and do not get a 10X return, we will refund whatever you pay us. No hassle or guilt-tripping.

Or, if you’d like professional help with negotiating better real estate deals, give us a call. We love watching our clients succeed at the negotiation table.

“When we entered the Charlotte market to purchase and redevelop the former Charlotte Coliseum, we did so under the leadership of John Culbertson. While we relied heavily on his market knowledge and relationships, the most important and long-lasting factor was that we trusted him. He delivered on his promises.”

-H. Mason Zimmerman, CCIM, SIOR, Senior Vice President, Pope and Land Inc., developer of City Park, Charlotte, NC

Real estate transactions can be fraught with frustration and pitfalls.

Sometimes the hardest part turns out to be working with your broker, the person who is supposed to help you through the complexities. Veteran commercial real estate broker and client advisor John Culbertson discovered that brokers’ interests aren’t always aligned with those of their clients. He realized there was a better way to advocate for clients and get the deal done.


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