Expert: Stephen A. Cross, CCIM - 2/8/2012

Question
can i request for rent reduction from my landlord after i signed the lease for retail(food service) space 2 years ago? It was 2yo shopping center, current with 60% vacancies. Now it advertises rent rate of $21/sf, $23/sf which i signed. My business is struggling and the rent is too high. how do i break the lease?

Answer
Kim:

Rental reductions are sometimes granted when a tenant can demonstrate they do not have the ability to pay the scheduled rent. However, it is unwise to quote the landlord's current asking rate when making your request.

Be prepared to produce your P&L statements for the last 2 or 3 years as evidence that a reduction is needed. Also, do not agree to defer any rental reduction until later in the lease. If the landlord is inflexible, and you cannot pay the rental amount, you should speak to an experienced bankruptcy attorney.

Steve