Strategy – Lease Renewal
A client reached out to me for advice when their existing sublease in a shopping center was scheduled to expire. Given the sublease rental rate was significantly less than the amount the original tenant (sublandlord) had been paying to the landlord, the landlord wanted my client to pay the “full” rent the sublandlord had been paying (plus an increase) in order to extend their occupancy in the shopping center. Unfortunately, the landlord was playing hard ball and insisted that my client would need to significantly increase the amount they were willing to pay or make plans to vacate the building at expiration of the existing lease. My client began their search for a new space, and at the last minute the landlord reached out to me to see if there was any chance my client would be willing to stay. Based upon my recommended strategy, my client was able to avoid moving and secured an extension of the lease that allowed either party to terminate the lease with sixty (60) days’ notice. That way landlord could terminate the lease if they found their “dream tenant” willing to pay more rent, and tenant could terminate if their revenue outlook changed or they found a better space. In exchange for the short-term deal, the landlord was willing to accept a rental rate at HALF of what my client was paying as a subtenant. Apparently, landlord has still not found their dream tenant since my client is still in the space. This “short-term” arrangement has been working for both parties for over five (5) years!