Commercial Landlords Managing Properties During COVID-19

Commercial Landlords Managing Properties During COVID-19

As employees return to work in office buildings, questions arise over the safety precautions landlords should be taking in correspondence with public health guidelines. The COVID-19 pandemic has brought uncertainty to people all over the world. One of the issues that major cities face is safely returning employees to work in shared office buildings. For this reason, landlords and those with commercial office portfolios have a lot to consider as these leased offices return to operation. With no known end date, it’s hard to anticipate how long businesses will be affected by profit losses. Even though businesses are closed and employees are working from home, the rent is still due. Below are ways to help commercial real estate brokers, landlords, and business professionals navigate these unprecedented times in regard to leased commercial property:

Office Tours

If you're giving or taking office tours because you need a new tenant or a new property, consider offering a guided office tour. That is the safest way to show your space to a new tenant. Otherwise, ensure that all people attending the tour are wearing personal protective equipment like facial coverings. Make sure they have no symptoms of being sick, and that plenty of hand sanitizer is available.

Renegotiating Rent

For landlords, make sure you're communicating with your tenants. Encourage them to file for insurance claims and loans like the Paycheck Protection Program. If a rent renegotiation is requested, keep in mind the tenant’s long-term viability, payment history, and remaining term on their lease. If you need to give rent relief, some landlords are reducing rent rates to cover the bare minimum or utilizing security deposits. Additionally, some landlords are deferring rent for a set time period.

Finding New Offices

If you are a business professional searching for a new office, take into consideration the ability of your employees to work from home. This may help you purchase less office space, since employees can alternate days in the office. You want to ensure that desks are at least 6 feet (1.83 m) apart or that employees have limited shared spaces.

Office Lease Negotiation

If you're entering into a new lease during these uncertain times, work with your tenant or landlord to find a mutually agreeable lease option. Tenants may qualify for a letter of credit from your bank. It will state that you’ll be able to pay your security deposit at a later date, if you’re unable to pay upfront.Brookfield Properties is “sharing information on potential sources of relief, near-term liquidity and reimbursement offered by the U.S. federal government.” If necessary, you may consider selling to a real estate investment trust such as Boston Properties or JBG Smith. There are many factors to consider. The most important aspects to cover are the health and safety of your tenants and employees as well as instituting flexibility whenever possible. BB&K Attorneys at Law suggest more actionable stepsfrom a legal standpoint.