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Brush Up On Negotiation Techniques For Lease Restructuring

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If the current economic times have hit your business hard, you are not alone. Numerous individuals and businesses have found themselves carefully tracking profits and losses, and you may be among the many feeling the tight grip of financial uncertainty. Though you believe that your business can continue, you know that some changes need to occur.

One change you may have on your mind is restructuring your commercial lease. The amount of rent you pay to utilize your current space could put you in a bind, but you know that you could face penalties for breaking a lease early. However, restructuring could allow you to remain in your current space without completely breaking the lease, but your landlord would have to agree to new terms.

Negotiation is key

Though you feel like you have strong reasons to restructure your lease, your landlord may not immediately see the issue from your side. After all, your landlord wants to make money too. So most likely, your landlord will not simply hear your request and immediately agree to restructure your lease terms. Fortunately, you can try to negotiate to reach favorable outcomes for both of you. Some tips for negotiation include the following:

  • Have a plan for new terms in mind. If you request a restructure without any idea of what the new terms should be, your landlord may not take your request seriously.
  • Consider the likelihood of your landlord consenting to the restructure. In particular, consider the loan your landlord has for the commercial space because a newer loan could mean that a lender has more control over the space than the landlord.
  • Show your landlord that the restructure could benefit both of you by explaining that a rent reduction would allow you to continue occupying the space, preventing your landlord from having a vacancy generating no rental income.
  • Determine whether a restructure will realistically help your situation. If rent reduction or other changes will not help you get out of financial trouble, it may not be worth the effort.

Many people think that because their commercial leases are legally binding documents that they are stuck with the terms they have. Luckily, that is not always the case. With willing parties on both sides, lease restructuring could prove useful to all involved.

Not feeling confident?

If you do not feel confident in your ability to successfully negotiate a lease restructure, you do not have to feel without hope. You could enlist the help of an experienced Florida attorney who could help you approach your situation confidently and assist you with the negotiations process.

By : admin | August 28, 2020 | Lease Structuring

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