Right now, landlords and tenants need each other in ways that have not been seen for a long while — if not forever. Landlords are having difficulty replacing their rental income, especially with leasing velocity at multi-decade lows.  And, tenants may not want to expend significant sums on moving costs and build-out or might be unable to justify the disruption inherent in moving.

Tenants — Take a serious look at your balance sheet and business needs both now and in the future.

• Is there predictability in your business model?
• Will you need more space five, 10 or 15 years from now?
• What do you need now to help your business weather these economic times?
• What will you need in the latter part of your lease term from the landlord so your business can thrive and expand?
• Can you extend your lease and make concessions to the landlord on matters the landlord may need to run the building and refinance?

Landlords – Take a serious look at your buildings and the rental market / competition in your area as well as where the pent-up demand may come.

• What are your short-term needs and long-term plans?
• What concessions can you afford to offer a tenant in exchange for early renewal of the tenant’s lease?
• Can you support tenant concessions or free rent now?
• Can these be layered into the lease for future application?
• Does selling the property to your tenant now or in the future look like an attractive option?
• Tenants may have the ability to finance an owner/user purchase more easily than landlords with only local holdings can refinance, particularly if the landlord wants to take money out of the asset now.

The opportunities for both landlords and tenants are limited only by the imagination of the parties and their advisors. By involving experienced real estate advisors early on in the process will allow both parties to view a variety of deal structures they may not have considered. Experienced broker representatives can also keep the parties on track to mutually beneficial solutions. Bargaining position in this economy doesn’t need to be about relative size or power. Successful landlords and tenants can find solutions that will benefit both sides.