In these unprecedented times, there is no right or wrong place to start negotiations or amount to ask for.
If you are generating no revenue, you may start the conversation by asking for rent abatement/deferrals based on what you believe can work for your business. The following examples have been shared by tenants and landlords:
- Full rent, NNN, CAM abatement on a month-by-month basis until businesses are reopened.
- Full rent, NNN, CAM deferral for the period of the commercial eviction moratorium and ask the lease to be extended by the period of deferred rent and have those deferred rental payments tacked onto the end of the lease.
- Full rent, NNN, CAM deferral, with the value of the deferred payments amortized over the remaining life of the lease.
- Full rent, NNN, CAM deferral, with the value of the deferred payments over a shorter period of time.(The longer the better for tenants.)
If your business is generating revenue, you could negotiate with your landlord to make partial payments based on the percentage of sales your business currently generates.
Keep your asks in writing, be sympathetic to your landlord’s situation (they may be having the same discussions with their lenders) and stick to facts and numbers instead of emotion.
Landlords have had a wide range of responses to date. Some are offering limited or partial relief, and some full abatements. Outcomes really vary on a case-by-case basis.
As you are negotiating with your landlord, please do think about who can help you with legal, accounting or brokerage advice. We have compiled some lease negotiation resources at the top of this page.