Most tenants accept their lease options and conditions as if they’re etched in stone. But just when you think something is non-negotiable in the commercial real estate world, think again.
When the Property Works Advisory Group works on your behalf, they’ll seek more favorable terms and TI allowances. They’ll even renegotiate contracts when sales decline, and restructure or liquidate under-performing properties.
Paying special attention to the bottom 20 percent of locations in the portfolio, they’ll help you make the tough decisions. The most common strategies for managing under-performers include:
- TERMINATE – When it’s time to “cut bait,” the preferred recovery method is to terminate low-performing leases. Negotiating this type of exit is the cleanest and most risk-averse. However, it typically requires a lump sum payment equal to a percentage of the remaining rent obligation. Skilled negotiators may even entice landlords to accept termination payment in installments.
