The unsettling market has expressed wide concerns for Landlords as tenants have reached out about subleasing their space and downsize their footprint. If you are a landlord have you received this call yet? As a Commercial Broker, I have. Many Landlords are dropping their rates to get space filled quickly in an effort to stem the competition from their own tenants about subleasing their space. It’s bad enough when the building across the street is a direct competitor to your building but when the Landlord’s tenants become competitors it always ends badly for building owners. Are you a Tenant, playing offense? Have you read your lease? Do you know what your options are and do you temporarily plan to down-size space? Your options will depend on the specific contract language and local laws. Contract language over the recent years have adapted to include “epidemic” or “Pandemic” scenarios, does your lease cover this? You might have a clause in your lease called, “Force ma-jeure” most commonly defined as unforeseeable circumstances that prevent someone from fulfilling a contract, is COVID-19 covered?
With more local governments mandating a city and state wide lock down of “non-essential business” this is pushing people into isolation, job losses are becoming more widespread across industries, and demand for office space is diminishing quickly. Since my last post on Friday referencing, “Should companies still expect to pay rent” I’ve received calls from Tenants seeking rent relief and Landlords not knowing what to do. In a recent article by CoStar it is estimated that the demand for subleasing space has risen 39% to 13.9 million square feet since March 13th and it’s only a matter of time before we see this number increase.
If you have questions about your lease or if you are a Landlord and need someone to work on your behalf to re-negotiate your lease with your tenant, please contact us directly.