Property Manager Backing Out of Raising Rents

[Prag Patel]

One of my PMs told me they were going to raise the rent from 900 to 925 for a tenant who has a lease expiring soon. After speaking with the tenant, they told me that they will not renew the lease if rent was increased by $25, and then asked whether it's ok to recant the increase. 

My question: Is this a wise choice to back out of a rent increase? Tenants are paying on time, and not abnormally hard to deal with than other renters. My fear is that this sets a precedence, that management is "weak". What are your thoughts?