Currently leasing your restaurant?

Currently leasing your restaurant?

Consider re-negotiating your lease amid COVID-19.

If you are not bringing in the revenue you did this same time last year you may want to consider renegotiating your lease. But before you approach your landlord with a lease renegotiation request, you will want to determine your desired outcome and develop an action plan. Depending on your knowledge of lease terms and conditions you may consider consulting with a tenant-broker, a person that specializes in representing your real estate interests and legal counsel to determine your options.

Build your strategic plan.

• Do your research.

• Crunch the numbers.

• Leverage your track record.

• Know the current leasing market.

• Assess your relative leverage and attendant risks.

• Discuss the future.

Now that you have a strategic plan it is time to approaching the landlord. First od it in. a timely manner. If you already have a good relationship with your landlord should help to start the uncomfortable conversation. Use this opportunity to remind them that you’re a valuable tenant who is trying to find a solution to keep your business alive. Maintain confidence and professionalism at all times. Present your well-thoughtout plan and reiterate your desire to find a solution for both your restaurant and their investment.

Once you’ve had a chance to discuss specifics, send a follow up email detailing the salient points of the discussion. Documentation is very important. If you are successful, a lease amendment should be executed by the tenant and landlord to memorialize the agreed upon solution. This amendment should specify that any changes writing and signed by both parties. It’s important to make sure that any changes to your lease – especially with respect to any rent payments – be documented. It is recommended to have legal counsel review any changes to the lease before signing anything that may impact your lease terms.

What if your landlord turns you away and rejects your request? First and foremost, this is a negotiation and you must be ready with a backup offer. It may take several tries to reach a solution. If you have trouble reaching an agreement, you may want to seek outside assistance from a tenant broker, a person that specializes in representing your real estate interests. As mentioned earlier, you may want to speak with one for insight before you begin the negotiation process.

Whatever solution you and your landlord agree upon, you should get confirmation that your landlord is ready to document the changes in a lease amendment. You should also get confirmation that your landlord will not issue any default notices in the meantime or during the period of time you are negotiating. It is recommended you retain legal counsel for this process.