Negotiating a lease renewal with the USPS United States Postal Service

[Andrew Schuellerman]

I purchased a property in Western New York that includes a small 1,200 sq. ft. local Post Office.  The post office has been at this location for 80 years and all of the residents need to pick up their mail from the Post Office, there is no delivery.  The USPS has historically entered into 5-year leases with this property.  The lease is not up for a couple years; however, the USPS has submitted a proposed lease to me for the next 5 years. I know I will need to hire an attorney.  I'm looking for advice from others that currently lease or have leased a property to the USPS.  Are there any groups for investors that lease to the USPS? I would like to increase the rent if possible and I'm curious how others have handled this negotiation. I am happy to share more information if needed.  Appreciate any advice.  Thank you!! 

[Michael Smythe]

The challenge when renting directly to the government is that they expect below market rents.

From what I've read in the past, most institutional investors look at these leases like US Treasury Bonds (extremely low risk) and expect a similar rate of return as bonds.

Keep this in mind while you try to negotiate a rent increase.