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Strategies For No-Grief Rent Relief
Recent downturns in the economy have increasingly found retail and office tenants in the position of having to seek rent relief in varying degrees from their landlords in an effort to overcome short-term financial difficulties. While the landlord finds unpalatable the prospect of reducing a rental income stream to which it has become accustomed, the prospect of having a vacancy in a shopping center, with its attendant adverse effect on neighboring tenants, as well as the additional costs involved in replacing the tenant through the payment of brokerage fees and lease inducements, may be even more unpalatable.
The landlord will face added pressure to come to some agreement with a financially strapped tenant in situations where vacancies already exist in the shopping center, where the tenant is key to the center, where the tenant's departure will trigger further departures from the center by tenants possessing co-tenancy clauses in their leases, or where the tenant's departure may have a domino effect on other tenants in the center.
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