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How to talk to your commercial landlord during COVID19

3 minute read
by Alex Hillman

I’ve written THOUSANDS of words across dozens of emails to our members since making the decision to close our coworking space during the COVID19 outbreak, most of which has been met with resounding affirmations and appreciation for how we’re handling things.

But through all of that, there’s one email that had me most stressed to write: the one to our landlord.

While there’s lots of noise on social media about the various ways that landlords are responding to the realities of tenants who cannot pay rent, I couldn’t really find much of anything about how commercial rentals are being handled except for this story about how National Chains like Cheesecake Factory and Mattress Firm aren’t paying rent while they’re closed.

After spending much of the last few weeks working to guide our community through the initial impacts of closing, and wasting countless hours fighting with the severely bungled rollout of the CARES Act loan applications (okay they are countable, it’s pretty close to 30 hours for which I have no certainty that we’ll ever see a nickel), I knew that we needed to ask our landlord for some kind of relief or flexibility.

In asking our landlord for assistance, I had a few things in mind:

  1. I know that their business is being impacted by the pandemic, too. Starting this negotiation with and “us vs them” attitude is unlikely to be helpful
  2. In addition to the painfully large dollar amount, being completely uncertain about the amount of time we’re expecting to be closed (and that it’s mostly in neither of our control) is a critical part that makes definitive negotiation difficult for all parties
  3. Less is more. I don’t need to give them a sob story of all of the ways this has been painful and difficult. I only need to give them enough information to show how our long term priorities are aligned and then ask them to respond.

After several drafts, here is what I ended up sending.

I hope you and your loved ones are doing okay in this very unprecedented situation.

Over the last few weeks since the government mandated closure of non-essential businesses, we’ve been focused most on keeping our community safe and doing everything we can to ensure that we are in a position to re-open our space as soon as possible after the stay at home orders are lifted.

Among other things, this includes deferring our members’ payments for space and services that they cannot use until we we-open, and the response has been positive so far. If things continue, we believe that we will be able to return to some version of full normal operation quickly after businesses are allowed to re-open.

Ultimately these short term changes are impacting our revenue intensely and unpredictably, worsened by the extremely unclear timeline on any sort of government relief. Rent is our largest expense, and ultimately one we are not able to pay while we are closed due to these circumstances outside of our control.

My hope is that you are willing to work with us to defer our rental fees during the time we are closed, so that we may return to paying full rent as soon as possible once we can safely re-open.

I recognize that everything about this is difficult and that you have costs and a staff to pay as well, but I am hopeful that the fact that we’re highly motivated to remain your tenant long term can provide some space for creative solutions.

Please let me know what you think, and what would be the best way to approach this discussion. Thank you.

To be clear, this email is NOT a magic wand that will make your landlord stop your rent. All landlords are different, and their willingness or capacity to be supportive right now will vary widely.

What it WILL do is open the door for a thoughtful and considerate negotiation.

Please use it wisely. Good luck.

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Hey, thanks for reading!

Alex Hillman I am always thinking about the intersection of people, relationships, trust and business. I founded Indy Hall in 2006, making us one of oldest fully independent coworking communities in the world. This site is packed with the lessons and examples I’ve learned along the way. You can find me on Twitter, too! 🐦 Say hi.