As owners of commercial real estate, the challenges of the COVID-19 pandemic and resulting effects on the economy are profound, disconcerting, and downright panic-inducing. At NAI Elliott, we stand side by side with our property owners to navigate this unprecedented time. How are we handling it, you might ask? Here are our best practices.
In a time of crisis, the best approach is to communicate, communicate, communicate. Be honest and realistic that this is a dire situation and that all of us will suffer consequences. Communicate proactively with tenants to provide resources. The requests for rent relief are coming fast and furious. Be ready with a standard response and prepare for individualized follow up.
We recommend that as a property owner considers any rent concessions, they follow these recommendations:
• Tenant must share communications and responses with insurance agent seeking coverage.
• Tenant must remain current on operating expenses.
• Tenant must provide specific justification and back up for how the situation is impacting ability to do business.
• Tenant agrees to hold any rent adjustments confidential.
• Landlord will waive appropriate late fees and default notices.
• Landlord will delay non-essential maintenance and repair projects.
• If landlord considers rent relief for those who request it, we suggest you waive rent for one month and extend the lease an additional month at the then applicable rate.
This crisis will end, even though it doesn’t feel like it as we sit in the middle of it. We believe the steps above will create a productive dialog with your tenants and maximize the ability for everyone to recover when this health crisis has been contained.
Please do not hesitate to let any of us know if you have any follow up questions or concerns.