For many companies the fear surrounding the latest Omicron variant surge has affected their “return to office” dates and this makes re-negotiating those leases much more interesting.
It seems landlords are being even more aggressive in trying to renew their existing tenants when leases are coming up, as well as attracting new tenants.
Sources report that landlords are not really dropping rates so much as they are more playing games with tenant improvement dollars. Plainly speaking, they are offering tenant improvement money even if the tenant does not need improvements, the value of which the tenant can use as rent credits. On their books the landlord can say this is a “capitalized cost”, even though it really is not, and the tenant can lower their effective rates. It really is just another shell game…but it can directly benefit the tenant.
One Orange County broker recently concluded a 25,000 square foot lease renewal where the landlord gave a $39.00 per rentable square foot…to be used any way the tenant wanted, which ended up being $975,000 in that case.
Lease language has always been and continues to be VERY important and Dean Sperling advises having a lawyer thoroughly review any commercial lease either on the landlord or tenant side to ensure absolute clarity.
Because companies that do not do this often find themselves in nasty legal disputes. They are EVERYWHERE! And when those things negatively impact YOU and/or YOUR business including bankruptcies, landlord/tenant matters including unlawful detainers, contract issues, nuisance ADA claims and even collections, call in your good guy business litigator, Dean Sperling to resolve YOUR matter with YOUR best interests in mind!