{"id":341,"date":"2020-04-16T19:12:09","date_gmt":"2020-04-16T23:12:09","guid":{"rendered":"https:\/\/www.lee-associates.com\/dc\/?p=341"},"modified":"2020-04-17T12:58:01","modified_gmt":"2020-04-17T16:58:01","slug":"six-things-to-consider-if-youre-struggling-to-make-rent","status":"publish","type":"post","link":"https:\/\/www.lee-associates.com\/dc\/2020\/04\/16\/six-things-to-consider-if-youre-struggling-to-make-rent\/","title":{"rendered":"Six Things to Consider If You\u2019re Struggling to Make Rent&#8230;"},"content":{"rendered":"<p><a href=\"https:\/\/www.lee-associates.com\/dc\/wp-content\/uploads\/sites\/78\/2020\/04\/Six-Things-to-Consider-if-Youre-Struggling-to-Make-Rent.pdf\">Six Things to Consider if You&#8217;re Struggling to Make Rent<\/a><br \/>\nby Patrick Scanlon &amp; John Colan<\/p>\n<p class=\"paragraph\"><a name=\"x__Hlk37941055\"><\/a><b>Right now you may be thinking about breaking your lease, tempted by the huge cost savings from eliminating one of the biggest line items in your budget. We get it. But it could be the costliest mistake you can make, especially when cooperation is far more profitable.\u00a0 There\u2019s a much better strategy.\u00a0<\/b><\/p>\n<p class=\"paragraph\"><span class=\"normaltextrun\"><b>Here is what we recommend <\/b><\/span><span class=\"normaltextrun\"><b>(and a few additional things to consider):<\/b><\/span><span class=\"eop\">\u00a0<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>1. You have leverage \u2013 use it <\/b><\/span><\/p>\n<p class=\"xmsonormal\">Uncertainty and fear of economic depression have\u00a0shifted negotiating power in favor of tenants.\u00a0 More\u00a0so than ever, landlords are desperate to preserve cash flow and projected revenue; tenants can use this\u00a0increased leverage to renegotiate leases, cut costs under the current agreement, or even\u00a0negotiate\u00a0a\u00a0new lease, depending on term remaining.\u00a0 Whichever document is subject of the negotiations, tenants are in the best position in recent history to demand a favorable deal.<\/p>\n<p class=\"xmsonormal\">Let us, or someone like us, initiate a\u00a0dialogue with your landlord. Be straightforward, forthcoming and\u00a0realistic with your broker about your financial situation.\u00a0 We can use this information to position your company to receive the best possible terms and\u00a0reduce your liability, but only if we know the whole story.<\/p>\n<p class=\"xmsonormal\">Once the discussion has begun,\u00a0we\u00a0can significantly decrease lease liability in one of two ways: reduce your size or reduce your rate. With respect to rate, trust your broker can get to the lowest possible number. In terms of contraction and resizing, keep in mind all the space you don\u2019t use. If it\u2019s more complicated than simply losing the billiards room, consider a free consult with a reasonably priced architect. Your broker can point you in the right direction.<\/p>\n<p class=\"p1\"><span class=\"s1\"><b>2. Time is money<\/b><\/span><\/p>\n<p class=\"p2\">Whether the goal is to reduce the size of your space or pay less per foot, or both, you\u2019ll only get there if the landlord agrees to it.\u00a0 This will be a negotiation, a give and take, so you must be willing to offer something of value if you expect your landlord to accept your demands. Usually, your most valuable bargaining chip is time, in the form of additional lease term. While you may have grandiose visions of moving your firm to a larger, nicer space when your current lease expires, times have changed. You must be willing to adapt, and an extension may be the wisest move at this time.<\/p>\n<p class=\"p1\"><span class=\"s1\"><b>3. Cut the dead weight <\/b><\/span><\/p>\n<p class=\"xmsonormal\">You can\u00a0also\u00a0save money\u00a0without a\u00a0new lease. Examine your existing agreement and look for ways that costs can be reduced. Go over\u00a0every word in the document, and loop in\u00a0any pertinent expert (attorney, broker, insurance specialist, CPA, etc.).\u00a0Good service professionals are happy to spend a little \u201cfree\u201d time to assist a client, especially now.\u00a0And if yours isn\u2019t, there are plenty who are.<\/p>\n<p class=\"xmsonormal\">Use\u00a0this\u00a0team\u00a0to re-evaluate\u202fexisting contractual considerations of operating costs as well as\u202fadditional variable commitments such as parking spaces, gym memberships, etc. \u202fThen trim the fat &#8211; be willing to\u00a0consider shedding\u00a0everything that is not\u00a0absolutely essential\u00a0to the\u00a0efficient operation of your business.<\/p>\n<p class=\"p1\"><span class=\"s1\"><b>4. Pay your rent if you can<\/b><\/span><\/p>\n<p class=\"p2\">Many tenants, some urged by brokers, have taken an aggressive, opportunistic approach with their landlords and used the pandemic as grounds for simply refusing to pay rent. This is not wise.\u00a0 Hostile business tactics at a time when empathy should rule show a lack of character that will not be soon forgotten.\u00a0\u00a0 A few months of rent is not worth being ostracized from future deals or blackballed from other properties.\u00a0 Further, as with any negotiation, there is a huge human element to discussions about lease terms.\u00a0 Approaching your landlord with an honest appraisal of what you can and can\u2019t do will count for a lot and only smooth the path to a favorable deal.<\/p>\n<p class=\"p1\"><span class=\"s1\"><b>5. If not, ask for help <\/b><\/span><\/p>\n<p class=\"xmsonormal\">Even the most conservative, oppressive landlords are showing enough compassion \u2013 or at least enough PR savvy \u2013 to offer some rent relief to struggling tenants.\u00a0 But you have to ask.\u00a0 And be prepared to show financial statements and other evidence of hardship.<\/p>\n<p class=\"xmsonormal\">Some landlords may abate rent immediately, for 1 or 2 months. Others may consider up to 180 days of rent reduction or deferral, and either amortize those months into the remaining lease term or add those months to the end of the lease. In any of these scenarios, you are far better off having asked the question.<\/p>\n<p class=\"xmsonormal\">Even in the unlikely scenario where you, your broker and the owner cannot reach an understanding,\u00a0you may still be able to negotiate a mutually agreeable termination of the lease.\u00a0 If you truly cannot pay \u2013 either your rent or a subsequent judgment to enforce the lease \u2013 then the owner has no interest in you staying.\u00a0 Even some nominal liquidated damages would put your business in a far better position than if you had walked out, because&#8230;<\/p>\n<p class=\"p1\"><span class=\"s1\"><b>6. <\/b><\/span><b>Cooperation is far more profitable<\/b><\/p>\n<p class=\"p2\">Actions in times of crisis demonstrate character and form your reputation.\u00a0 You do plan to do business again, right?\u00a0 Because unless remote working manages to present a suitable replacement for every client or team interaction, your business will need office space.\u00a0 And it is very likely that today\u2019s landlords will be tomorrow\u2019s landlords. If you are willing to cooperate while we all sit on this side of the curve, you will reap the rewards many times over once we reach the other side.<\/p>\n<p>&nbsp;<\/p>\n<p><b><i>Patrick and John are both commercial real estate brokers with Lee &amp; Associates and former practicing attorneys.<br \/>\n<\/i><\/b><b><i>They represent office tenants in DC, Maryland, and Northern Virginia.<\/i><\/b><\/p>\n<p>&nbsp;<\/p>\n<p class=\"p1\"><span class=\"s1\"><b>PATRICK SCANLON, <\/b>Director &#8211; Tenant Advisory\u00a0<\/span><br \/>\no: 202-892-5944 | c: 703-314-1112<br \/>\npscanlon@lee-associates.com<\/p>\n<p class=\"p1\"><span class=\"s1\"><b>JOHN COLAN,<\/b><\/span><b> <\/b><span class=\"s1\">Tenant Advisory<br \/>\n<\/span>o: 202-892-5946 | c: 804-513-1566<br \/>\njcolan@lee-associates.com<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Six Things to Consider if You&#8217;re Struggling to Make Rent by Patrick Scanlon &amp; John Colan Right now you may be thinking about breaking your lease, tempted by the huge cost savings from eliminating one of the biggest line items in your budget. We get it. But it could be the costliest mistake you can make, especially when cooperation is far more profitable.\u00a0 There\u2019s a much better strategy.\u00a0 Here is what we recommend (and a&#8230;<\/p>\n","protected":false},"author":138,"featured_media":359,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[256,197,198,257],"class_list":["post-341","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-covid","tag-jcolan","tag-pscanlon","tag-tenant-advisory"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.6 (Yoast SEO v28.6) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Six Things to Consider If You\u2019re Struggling to Make Rent... - Lee &amp; Associates | Washington, DC<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.lee-associates.com\/dc\/2020\/04\/16\/six-things-to-consider-if-youre-struggling-to-make-rent\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Six Things to Consider If You\u2019re Struggling to Make Rent...\" \/>\n<meta property=\"og:description\" content=\"Six Things to Consider if You&#8217;re Struggling to Make Rent by Patrick Scanlon &amp; John Colan Right now you may be thinking about breaking your lease, tempted by the huge cost savings from eliminating one of the biggest line items in your budget. 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But it could be the costliest mistake you can make, especially when cooperation is far more profitable.\u00a0 There\u2019s a much better strategy.\u00a0 Here is what we recommend (and a...","og_url":"https:\/\/www.lee-associates.com\/dc\/2020\/04\/16\/six-things-to-consider-if-youre-struggling-to-make-rent\/","og_site_name":"Lee &amp; Associates | Washington, DC","article_published_time":"2020-04-16T23:12:09+00:00","article_modified_time":"2020-04-17T16:58:01+00:00","og_image":[{"width":1024,"height":576,"url":"https:\/\/www.lee-associates.com\/dc\/wp-content\/uploads\/sites\/78\/2020\/04\/DontBreakYourLease-1.jpg","type":"image\/jpeg"}],"author":"rjones","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rjones","Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.lee-associates.com\/dc\/2020\/04\/16\/six-things-to-consider-if-youre-struggling-to-make-rent\/#article","isPartOf":{"@id":"https:\/\/www.lee-associates.com\/dc\/2020\/04\/16\/six-things-to-consider-if-youre-struggling-to-make-rent\/"},"author":{"name":"rjones","@id":"https:\/\/www.lee-associates.com\/dc\/#\/schema\/person\/f7ca4a1afb2d2ff41fe0a12b69f4a0a6"},"headline":"Six Things to Consider If You\u2019re Struggling to Make Rent&#8230;","datePublished":"2020-04-16T23:12:09+00:00","dateModified":"2020-04-17T16:58:01+00:00","mainEntityOfPage":{"@id":"https:\/\/www.lee-associates.com\/dc\/2020\/04\/16\/six-things-to-consider-if-youre-struggling-to-make-rent\/"},"wordCount":986,"commentCount":0,"image":{"@id":"https:\/\/www.lee-associates.com\/dc\/2020\/04\/16\/six-things-to-consider-if-youre-struggling-to-make-rent\/#primaryimage"},"thumbnailUrl":"https:\/\/www.lee-associates.com\/dc\/wp-content\/uploads\/sites\/78\/2020\/04\/DontBreakYourLease-1.jpg","keywords":["COVID","jcolan","pscanlon","Tenant Advisory"],"articleSection":["Blog"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.lee-associates.com\/dc\/2020\/04\/16\/six-things-to-consider-if-youre-struggling-to-make-rent\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.lee-associates.com\/dc\/2020\/04\/16\/six-things-to-consider-if-youre-struggling-to-make-rent\/","url":"https:\/\/www.lee-associates.com\/dc\/2020\/04\/16\/six-things-to-consider-if-youre-struggling-to-make-rent\/","name":"Six Things to Consider If You\u2019re Struggling to Make Rent... - Lee &amp; Associates | Washington, DC","isPartOf":{"@id":"https:\/\/www.lee-associates.com\/dc\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.lee-associates.com\/dc\/2020\/04\/16\/six-things-to-consider-if-youre-struggling-to-make-rent\/#primaryimage"},"image":{"@id":"https:\/\/www.lee-associates.com\/dc\/2020\/04\/16\/six-things-to-consider-if-youre-struggling-to-make-rent\/#primaryimage"},"thumbnailUrl":"https:\/\/www.lee-associates.com\/dc\/wp-content\/uploads\/sites\/78\/2020\/04\/DontBreakYourLease-1.jpg","datePublished":"2020-04-16T23:12:09+00:00","dateModified":"2020-04-17T16:58:01+00:00","author":{"@id":"https:\/\/www.lee-associates.com\/dc\/#\/schema\/person\/f7ca4a1afb2d2ff41fe0a12b69f4a0a6"},"breadcrumb":{"@id":"https:\/\/www.lee-associates.com\/dc\/2020\/04\/16\/six-things-to-consider-if-youre-struggling-to-make-rent\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.lee-associates.com\/dc\/2020\/04\/16\/six-things-to-consider-if-youre-struggling-to-make-rent\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.lee-associates.com\/dc\/2020\/04\/16\/six-things-to-consider-if-youre-struggling-to-make-rent\/#primaryimage","url":"https:\/\/www.lee-associates.com\/dc\/wp-content\/uploads\/sites\/78\/2020\/04\/DontBreakYourLease-1.jpg","contentUrl":"https:\/\/www.lee-associates.com\/dc\/wp-content\/uploads\/sites\/78\/2020\/04\/DontBreakYourLease-1.jpg","width":1024,"height":576},{"@type":"BreadcrumbList","@id":"https:\/\/www.lee-associates.com\/dc\/2020\/04\/16\/six-things-to-consider-if-youre-struggling-to-make-rent\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.lee-associates.com\/dc\/"},{"@type":"ListItem","position":2,"name":"Six Things to Consider If You\u2019re Struggling to Make Rent&#8230;"}]},{"@type":"WebSite","@id":"https:\/\/www.lee-associates.com\/dc\/#website","url":"https:\/\/www.lee-associates.com\/dc\/","name":"Lee &amp; Associates | Washington, DC","description":"LOCAL EXPERTISE. 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