Post-Coronavirus, Here’s How Commercial Tenants Can Leverage Their Lease in New Ways

AdobeStock_359775405-300x200Tenants across America have faced unprecedented challenges during the COVID-19 pandemic. Most of the eviction moratoriums have focused on residential leases, in order to keep Californians home and healthy during these dangerous times. Small business owners have also been granted some eviction protections. Regardless of your business size, you might be surprised to learn just how much leverage you have in your commercial lease. Below are three critical strategies that can help your business try to remain financially healthy during and in the wake of the coronavirus.

Renew Your Current Lease

Businesses that are on relatively strong financial footing, and whose leases are expiring in the next six to eighteen months, may find themselves with greater leverage to negotiate renewal terms. Landlords are hesitant to lease to new tenants (who they may not be able to evict). With the U.S. economy is in downturn and the economic future uncertain, landlords are also worried about their future rental prospects. In such conditions, commercial tenants who have remained in good financial health and standing with their current landlord will be well-positioned to negotiate lease renewals with favorable terms.

Sublease from Another Commercial Tenant

Because so many businesses have had trouble paying the rent during the pandemic, the sublease market may currently be favorable for commercial tenants. In some cases, businesses may be able to negotiate a sublease on below market terms for the property. Tenants who are behind on the rent might be willing to make up the difference in order to avoid an eviction, and landlords might be willing to accept a subtenant below market rate instead of incurring an eviction’s costs. A savvy commercial property lawyer may very well be able to help you leverage these conditions into a favorable sub-tenancy agreement.

Relocate

If your current lease isn’t working for you, the best option might simply be to relocate the business entirely. Landlords are eager to rent commercial spaces in this economic climate. The commercial real estate market has been hit especially hard, which has had an effect on rental rates. You could end up leasing larger premises for less monthly rent, and negotiate more favorable terms for renovations, use restrictions, adjunct parking and industrial areas, or other terms that will help your business success.

The Right Business Lawyers for Commercial Lease Issues in Silicon Valley

COVID-19 has caused much hardship for all types of tenants throughout California. Commercial tenants have a sizeable financial stake in their leases, and it is important to work with an attorney who understands the legal issues created by such a lease. The experienced commercial lawyers at Structure Law Group can help protect your property rights and financial interests. We know how to strategically address the problems facing business owners and serve clients in San Jose, Palo Alto, and Silicon Valley. Call (408) 441-7500 or contact us through our website to schedule a consultation.

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