It is finally happening—well sort of. Cities and states acrossthe country have started to reopen; although a surge in outbreaksthis week has stalled or even reversed reopening plans. Still, asthe country moves toward reopening, both owners and tenants arewondering how it will impact rent deferral agreements. Depending onthe terms of the deferral agreements negotiated at the beginning ofthe pandemic, reopening could indicate that businesses will need tobegin paying rent once they open. However, many businesses arestill experiencing hardship, especially as government stimulus isdrying up.

"The logistics of reactivation of all real estate product typescontinues to be a hot topic, and many architectural and consultingfirms seek to assist in creative ways to use space," MarkLeverette of BPM LLP, "The space requirement calculations used havebeen in fluctuation over the last three months for many businesses.Some businesses may temporarily need more space per person, at thesame time as projecting both temporary and permanent increasedlevels of those working remotely."

So far, smaller landlords have been more flexible in providingrent deferral and lease modifications for tenants, but the requestsfor relief are likely to continue beyond the reopening."Anecdotally, to date, institutional landlords have been lesswilling to provide modifications while small business landlordshave been more flexible," says Leverette. "All landlords shouldexpect that these tenant requests will continue for an extendedperiod of time, and continued and creative negotiation will berequired."

Continue Reading for Free

Register and gain access to:

  • Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.