June 25, 2020
As COVID-19 (Coronavirus) has found its way onto the forefront of news across the world in recent months, it’s also found its way into bank accounts. In other words, some businesses simply do not have the money to pay the rent they had before Coronavirus. If you’re in a situation where your income has been diminished as a result of stay-at-home or safer-at-home orders, you’re not alone. There are thousands of businesses across the country that are closing their doors as a result of the pandemic. If your business was strong enough to survive the virus, this is your time to shine in terms of commercial real estate leases. Why? Property owners need your income, and if you were able to get past the last few months, you may have leverage.
Any reputable commercial real estate agency will tell you that you need to have the health and well-being of your employees at the forefront of your decision to move back into your office space during or after COVID-19. So, why is this a great time to renegotiate your commercial office lease?
When you rent business space, you need to be comfortable with all of the amenities, and right now that includes the cleaning and sanitation that your property management company provides. If you’re not completely convinced that your building is sanitized regularly and fully, you need to demand a reduction in your rent. Even if they’re doing the best they can, the best may not be good enough, and you deserve a reduced rent if you’re responsible for any part of the cleaning.
Some buildings have state-of-the-art filtration systems, which help keep employees and customers safe. If your current building has an outdated filtration system, this is cause for you to ask for your lease to be renegotiated.
The days of simply vacuuming the floor once a week and taking the trash out nightly are over. Now that COVID-19 has reared its ugly head, workspaces, including desks, kitchens, and bathrooms need to be thoroughly sanitized several times throughout the day. If you don’t see this happening in your building, your landlord should owe you the right to renegotiate your lease.
The typical commercial lease doesn’t address viral pandemics, but now that we’re in a different age, your landlord should be able to openly talk about their initiatives to keep its tenants safe. If they’re unable or unwilling to do this, they might not have any safety plans in place for now or for the future. Be suspicious if there are no plans in place to keep you safe.
It’s time for the negotiation. Where do you start? First of all, you need to thoroughly understand what’s in your current lease. There are several types of commercial leases and knowing the terms of your current situation will help you understand what needs to change moving forward.
Next, contact your landlord or property management firm and invite them to renegotiate in writing. Outline your circumstances with evidence-based on the reasons noted above regarding when and why you should request a lease renegotiation during COVID-19.
Finally, be on the lookout for “rubber rulers.” These are incorrect items in a lease, such as inaccurate measurements, which could lead to you overpaying since most commercial leases are based on square footage.
If your landlord or property management firm isn’t willing to budge on your lease, maybe it’s time to rethink your strategy. As COVID-19 has shown us, working from home is far more possible than many organizations realized. If there’s no compromise taking place, consider downsizing your office space and implementing more work-from-home initiatives. You don’t need small buildings for lease to get the work done, you just need a solid internet connection and a devoted workspace within your home.
There’s no real how-to guide when it comes to how to lease or buy commercial real estate, but there are experts who are here to guide you along the way. Rakow Commercial Realty Group is helping our clients negotiate the best prices for their office space leases. If you’re interested in finding out how you can make the most of your money, reach out to our team – we’re the experts in business real estate in Westchester County! Let us help you find the right path for staff.
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