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would appreciate any help on how to approach landlord (whom I don't know) on reducing my commercial lease ,at least temporarily,my flower shop is slowing and pricing everywhere is rising.Just purchased 11 months ago and my marketing is only beginning to show.Thanks in advance
Joanne-
I am sure you know that this happens to be one of the worst times ever to be needing a financial break from a landlord. They are having significant problems also with their revenue.
You should approach your landlord confidently with a specific plan to revise the terms of your rent payments on your lease. Suggest that you believe that having a specific reduction in your monthly rent for a specific number of months (or a year, 18 months, etc.) will give you the breathing room to get your revenue flowing in again because of: a.) something you are doing in your proactive marketing or business plan to generate more business in the near future, or b.) something about the economy that you have analyzed will be creating some form of new income opportunity for you in a reasonable amount of time, or c.) if you don't get a rental reduction you will have to file for bankruptcy protection immediately and he (the landlord) won't be able to collect anything from you for rent.
The difficulty of the economic problems is really beginning to wear on everyone in the country now, and I believe that even the best sounding business recovery plans are starting to sour as soon as a landlord realizes that is what you are pitching to them. Many more landlords than you realize are reaching the tipping point on the solvency of their real estate projects now and much that has been just below the water level is about to appear above the surface and expose the deeper problems that many landlords have been able to hide until now.
You should offer your plan to your landlord in spite of the country's broad economic problems and perhaps you will be lucky and find your landlord has some flexibility left regarding his project and is able to offer you a lifeline. Do not ask for less reduction than you need, and offer some off-setting rental benefit to the landlord to make back increased rental once the rough period has passed. There must be a later upside benefit in rent to the landlord to pay him back for his forbearance now or I don't believe he will be receptive to your suggested adjustment to your rent. Just be sure to give your landlord something that sounds at least slightly pragmatic. At this point I think that many landlords want to find a way to reduce their tenant's back-breaking rental load, but they sense they must have something to base it on.
I wish I could help you with something significant, but there isn't much that works well at this point.
Good luck my friend. I do not believe that we are at the end of the tunnel yet despite what exhausted tenants would like to believe. This is a very significant problem in our country's economic history.
Remember you are not alone in your struggles.
-Jim
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Answers by Expert:
Jim Avancena, CPM
Expertise
Best qualified to answer questions that involve commercial leases, that is, basic issues as well as the often unexpected effects of the complexities and inter-relationships of the provisions a lease may contain, explain how seemingly innocuous text in your lease can have a major impact on a Tenant or Landlord and their business operations, and the common practices utilized in the industry. I can untangle most matters that may come up from the time a tenant begins searching for a office or store space and the lease acquisition process, concerns related to remodeling/improving the leased premises, moving-in, subletting or assigning the leased space, and a long list of problems that may come up during the lease term and even after a tenant moves out. I have practical experience with most property management issues and resolving landlord and tenant disputes - especially those involving what may appear to be overcharges assessed for additional lease charges like CAM costs, operating expense reimbursement, real estate taxes, utilities, construction improvements etc. Note that I am not an attorney and cannot provide legal advice.
Experience
Thirty years active experience in the commercial real estate industry as a licensed real estate broker in the Washington DC Metro area (DC, Northern Virginia & Maryland). I have been admitted (approved) by the Maryland and DC courts to testify as an expert witness on the subjects of Commercial Leasing and Property Management in the area of standard industry practices. I have had a business for the last 14 years advising virtually every form of business entity from large national corporations to the smallest ma & pa new businesses regarding a wide range of commercial real estate matters in addition to property management and commercial leasing.
Organizations
Currently my three children keep me so busy that it is difficult to participate in organizations with continuing and specific time requirements.
Publications
I publish a local commercial real estate newsletter titled: "Tenants First". My firm was the subject of a high profile Washington Post business section cover page (2.25 full pages) feature story on January 13, 1993; titled "Overcharging Overhead".
Education/Credentials
BA in Political Science from Memphis University, and five years of study in the real estate development summer program at MIT. I was certified as a commercial property manager (CPM-IREM), and currently hold a brokers license in Maryland and the District of Columbia.
Awards and Honors
The same plaques and honors that most others in my industry have earned. I have none that I consider especially meaningful.
Past/Present Clients
Past clients include: The World Bank, George Washington University, National Association of Criminal Defense Attorneys, US Department of Commerce, The American Benefits Council, K-Mart Development, many law firms, a national union, other major organizations, and many, many small business firms and retail operators that I am most honored to serve. I estimate more than 1,500 firms/organizations.
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