With consumer spending and business investment still weak, a higher number of commercial property tenants are requesting rent reductions from the landlords. Their argument is that they can no longer afford to pay the per-square-foot prices that were in effect a year or two years ago. Some tenants are threatening to vacate their space when their lease expires or file for bankruptcy in an effort to convince their landlords to grant concessions.
West Palm Beach commercial real estate broker Edward Kearney of Kearney Commercial Group, an affiliate of Sperry Van Ness brokerage firm, is offering advice to landlords that may be inclined to approve a rent reduction without first weighing all of their options.
Landlords Do Have Options
“It is better to have someone in the space paying rent, albeit at a lower rate, than having the space vacant, says Ed Kearney. “But the process is a negotiation.”
The West Palm Beach broker suggests that landlords feeling the pressure of allowing a requested reduction to keep themselves afloat may be able to get something in return for making a concession.
“Don’t agree to lower rates without investigating all the possibilities or concessions that the tenant may give to the landlord in exchange for lower rent,” says Kearney of Sperry Van Ness.
Among the concessions could be an extended lease, a special provision for raising rent as the tenant’s business improves, and better collateral guarantees. Kearney suggests agreements to lower the rent may be more viable for tenants who are under short-term contracts and have less than sterling credit rather than for those with excellent credit and long-term lease contracts.
Kearney encourages those with specific questions on any aspect of West Palm Beach commercial real estate to contact his firm by calling 561-616-6262, or visiting http://www.svnpalmbeach.com today.
About Edward Kearney and Sperry Van Ness
Edward Kearney is a Managing Director for Sperry Van Ness with an extensive background in various aspects of commercial real estate (http://www.svnpalmbeach.com/Florida-Investment-Real-Estate-Opportunities.shtml)including investment analysis, landlord and tenant representation, and property tax abatement. SVN is a leading national brokerage firm that markets commercial real estate properties to an investment and brokerage community of more than 100,000. Kearney welcomes investors, brokers, and others with an interest in the Florida commercial real estate market to contact him today by calling 561-616-6262, or visiting http://www.svnpalmbeach.com for more information about the services he provides.
For more information about Edward Kearney, Kearney Commercial Group, or Sperry Van Ness, please visit http://www.svnpalmbeach.com.
