The following article originally appeared in the November 2012 edition of The Myers Report newsletter published by the firm.
It’s Good to be the Tenant!
By Jane M. Myers, Esq.
Right before Hurricane Sandy struck, I had breakfast with an astute and well-respected commercial real estate broker whose focus is office leasing in New York City and Long Island. I told him that lately, our clients were bringing us some amazing lease deals to review. I needed to know if what we were seeing were aberrations in the real estate market or indicators of a more widespread trend.
What the broker told me is this:
There are some really good leasing opportunities right now. There are also great sub-lease opportunities.
So what does this mean for your business?
Landlords are going to great lengths to avoid vacancies and attract reliable tenants. We’ve recently negotiated a transaction that included a year’s free rent and another with thirteen (13) months’ free rent for prime office space on Long Island. A deal in a landmark NYC building closed recently with four (4) months’ free rent. We closed another lease for a client on Long Island where the landlord agreed to skip rent escalations for a year. We’re also seeing generous work letters paid for by the landlord.
What should you do?
There are some very reputable commercial real estate brokers who only represent tenants in leasing transactions. It will be well worth your time to consult with them now. They can review your lease, compare your current terms with what’s available in the market place, evaluate all the costs and advise whether: (1) your lease reflects current market conditions so there’s no need to do anything; (2) it makes sense to stay where you are and negotiate a better deal; or (3) you should take advantage of the market and look for space elsewhere.
Feel free to contact Jim or me at (516) 470-1661 if you would like more information about this process.
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Please note that this article is intended only as a general discussion and that it should not be taken as creating an attorney-client relationship or as legal advice with respect to any particular person, business or situation. Circumstances and the applicable legal principles vary and you should consult with an attorney and/or other professionals concerning the facts of your particular situation.