When it comes to tenant retention, lease renewals and lastly, those cycles where the context of the times sometimes scream out for a lease restructuring, given the consequential fallout associated with vacancy turnover, legal, brokerage, architectural, tenant improvement allowance, landlord work, and lastly, free rent concession costs associated with a tenant channeling the Grateful Dead song “Truckin’” and moving on to another office or retail space, landlords need to become bigger fans of the musicians known as CSNY, George Benson, and Sting from The Police. Stated differently, from the school of “life is a lesson and I won’t make the same mistake next time,” landlords should respectively consider listening to the songs “Love the One You’re With,” “Never Give Up on a Good Thing” and “So Lonely” as they stand in the once occupied space of a dearly departed and rent paying tenant who has made like LeBron James and taken their “talents” to another landlord’s building.
Both in life and in business, as cows go to pasture and pigs get slaughtered, please subscribe to my “I’m Not a Ravenous Pig-A Good Percentage of Something is a Hell of a Lot Better Than Nothing Theory.” In laymen terms, if as a landlord I am confronted with the possibility of losing secure and stable cash flow from a long term, rent paying tenant, given the alternative, I would prefer to offer the tenant as an inducement to extend its lease a bone in the form of a few months of free rent spread out in one-half monthly increments along with a “mind if I freshen up” TLC tenant improvement allowance of $10-$15 per square foot, as opposed to having the aforementioned greater turn over costs associated with bringing a new tenant into my building.
As to lease restructuring, if until the recent past the tenant looking to be thrown a temporary rental relief lifeline was only heard from by building ownership when his or her check arrived in a timely fashion at the beginning of the month, then if the tenant’s “tale of woe” passes the smell test and provides a convincing game plan which will allow the tenant to “weather the storm” thereby enabling the landlord and tenant to live happily ever, then to me having a good percentage of something rather than 100% of nothing is a very good thing!
As to the drive-in movie theater aspect of our theory, for those of you not old enough to even know what many people went to a drive-in not just to watch the movie if you catch my drift, it is our belief that having vacant space is akin to going to a drive-in movie by yourself … in a taxi cab … with the meter running … and in the case of a single parent experiencing the foregoing, having to pay for a babysitter for the kids left at home! It makes no sense!