Since the government shutdown of non-essential businesses, to “plank the curve” of COVID-19, revenues have plunged and many businesses don’t know how they’ll make their monthly lease payments.
Are you facing this dilemma? Here are some TIPS to help you to address, negotiate and formulate a lease payment plan with your landlord to help keep your business afloat, create a good relationship with him/her and maintain some cashflow until things get better.
TIPS FOR CRE TENANTS:
1. Consider rent deferrals or abatements (rent-free period). You can add it back to the base rental and spread it across the remaining lease term when things pick up again.
2. Communicate with your landlord & negotiate a plan in a sensitive, confident manner.
3. Offer your landlord plan (with some flexibility as the crisis plays out) to repay missed lease payments when things improve.
4. Because landlords still have to make their mortgage repayments, land taxes, council rates, water rates & building insurance, offer to pay what you can to help each other.
5. Inquire with your landlord if you can make reduced lease payments.
6. Put a valuation together to present to the bank, for an increase in a line of credit. This will help to make your timely lease payment.
7. Explore any grants or funds made available to businesses under the government’s stimulus measures that were recently announced.
8. Think outside the box: If your space is temporarily too big, sub-let it to another tenant (share the cost of the space)
Everyone’s situation is unique. I can help you navigate the complexities and create a plan that works for you. Please reach out to me to discuss your best course of action on lease payments:
Jonathan Gorenstein
Commercial Real Estate Advisor
Office: 905.917.2044
Cell: 416.471.0904
Email: jonathan@lennard.com
