Rent Relief Strategies: How to Approach Your Landlord
While the coronavirus (COVID-19) pandemic has changed all our lives in a very short amount of time, healthcare providers are still on the front lines working to protect us. In Illinois, Governor J.B. Pritzker has extended the “stay-at-home” order for all residents through the end of April to help stop the spread of COVID-19. The Illinois State Dental Society (ISDS) has also recommended that dentists cease all in-person dental treatment except for dental emergencies throughout this time. This means that residents, dentists included, are spending a lot more time in their homes. As we do our best to flatten the curve of COVID-19 together, there is a benefit to all this extra time for aspiring practice owners and entrepreneurs.
As practice owners, you’re evaluating laying off or furloughing employees, trimming overhead, and/or waiting on aid from the CARES Act, we can provide guidance to practice owners who are cash-strapped during this crisis and who need help approaching their landlord for relief.
Communicating With Your Landlord
Many of our clients have reached out for help approaching their landlord in this stressful time. When speaking to your landlord, express empathy and acknowledge that they are also going through a difficult time.
We have seen landlord reactions vary greatly from granting full rental abatements until practices reopen, to offering zero concessions. It is important to approach your landlord with humility to achieve the end results you want.
First, ask for free rent (abatement)
Second, ask for rent to be deferred to a later date
Third, if necessary DON’T pay your rent; force a workable solution
There has never been a better time to communicate with your landlord as both sides are in a position of dire need. For some, this may be the most opportune time to restructure your lease. Your landlord will likely not want to lose you as a tenant, we are heading back to a tenant’s market.
Not all landlords are in a position or are willing to grant rent relief immediately, so you’ll need a strategy for what you’re asking for and why. Before COVID-19, landlords were in a strong position of power. However, as more individuals and companies are tightening their belts, there will likely be a rise in vacancies.
Landlords will need to find new tenants quickly in order to reduce their potential losses. They may be more willing to negotiate and cut a deal with new tenants. Nevertheless, landlords with ideal real estate may display a greater level of confidence to backfill their vacancies with strong anchor tenants, such as grocers or fitness centers.
Having the right team on your side is critical. If communicating with your landlord sounds like a daunting task, speak to one of our advisors today to learn more about finding a solution that works for both parties. With JRA, you will know that you’re getting someone who:
- Knows the market in which your practice is located
- Formulates real-time comparable properties to create the illusion of moving your office
- Develops creative deals structures to build leverage
Now is the Perfect Time to Negotiate your Lease Renewal
If you have fewer than four years left on your lease and want to remain in your office space long term, now may be the perfect time to negotiate your lease renewal. Extending out for a longer-term in exchange for receiving benefits now such as free rent and a lower rental rate provides a healthy solution for both sides.
Current practice owners can rest assured that during this unprecedented time, Joseph Rossi & Associates is working diligently to provide our clients with the best information possible to leverage a favorable outcome. We’d appreciate the opportunity to listen to your practice needs and discuss all possible deal structures with you. Call 630-353-1190 to speak to one of our advisors today!