Resetting Landlord-Tenant Dynamics to Lease Commercial Space during COVID

Landlords and prospective office and retail tenants are advised to explore ways to reset and help each other grow over the next 1-2 year recovery. This will involve both parties to become “experimentation partners” to determine what works and what doesn’t work, toward achieving a stabilized rent payment stream.

Here are three ways landlords can adjust their offerings to partner with tenants to get through COVID recovery:

  1. New commercial leases can be structured to set the first 1-2 years at a COVID recovery rent rate. At the end of this period, both parties will have the opportunity to revisit and reset the rent to the market rent rate to continue operating with flexible timing and payment structure.
  2. Landlords can offer tenants temporary use of additional vacant and/or amenity spaces in the building to create additional spacing for their employees and patrons.
  3. Landlords can offer online “digitally native” retail tenants with hybrid flex office-retail space to run their online business and experiment with physical retail space starting with short-term pop-up retail to establish brand awareness and ultimately sales.

Structuring the alignment of interests and seeing the current problems from side is the key. It’s a different conversation now with your tenants and you actually have to partner with them in more ways than you would have ever thought.

B.RE assists investors and lenders of commercial mixed-use properties to structure and execute these strategies through our asset management services. Feel free to contact us if we can be of assistance.