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Are You In A Position To Restructure Your Commercial Lease?


When you first set up shop in your commercial space, you may have felt comfortable with the lease terms. Those terms likely included the length of the lease, the rent you would pay for the space and more. As time has gone on, however, you may have found that the area in which your commercial space resides has proved less than ideal. On the other hand, the market rent in the area may have gone downhill, and you now believe you are paying too much rent for comparable spaces.

Understandably, you may wonder what you can do. After all, paying too much in rent could easily result in losses for your business, and with the current state of affairs around the world and its effect on businesses in Florida and elsewhere, you need to focus on ways to increase your profits. Fortunately, lease restructuring may be an option for you.

What does lease restructuring involve?

As the name suggests, lease restructuring involves making changes, or restructuring, the terms of your commercial lease. Even if you still have time left on your lease, you may not suffer penalties for early termination or term violations if you choose to restructure instead. Of course, restructuring a lease can prove complicated, but meeting the following criteria could help your landlord consider restructuring your lease in a more favorable light:

  • The less amount of time you have left on your lease, the better. If you have two years or less left on your lease term, your landlord may have a more accepting stance toward restructuring, especially in a down market.
  • If market rent conditions in your area have gone significantly downhill, as is likely under the current economic circumstances, you may have a greater chance of negotiating new lease terms.
  • Your company also needs to have relatively good standing when it comes to credit. A landlord does not want to agree to restructure a lease in efforts to keep a space filled, only for a tenant to have to shut its doors soon after due to debt issues.

Of course, numerous other details can go into whether a landlord will be receptive to restructuring a lease. Hopefully, given the difficulties many businesses are facing, you will have some success.

How can you negotiate new terms?

If your landlord does agree to restructure your lease, do not expect him or her to simply agree to just any terms you offer. Some back and forth will likely occur, and you will certainly want to keep your best interests at the forefront. Fortunately, you can work with an experienced Florida attorney who could help you negotiate and draft a restructured commercial lease.

By : admin | August 26, 2020 | Lease Structuring