Evan Reynolds of Dental Space Advisors presents strategies and tips to negotiate with you landlord while your business is closed or running emergency hours only.
Evan Reynolds of Dental Space Advisors works almost exclusively with dentists to help negotiate their leases and target locations for a new startup practice.
What is your suggestion for dealing with landlords? We have found that the most effective thing is to reach out to them personally, not necessarily a form letter or even his company contacting them as a third party. Most landlords have been willing to help with something like a deferral program with payback within 12 months is a good approach. Make a personal appeal and express that it is a mandatory government closure. Other options have included abatement with a lease extension if it is coming up in the next few years. It’s about cashflow and showing that there is a give and take.
If you have a lease renewal coming up, start working on negotiating 9 months to one year in advance. Make sure that they understand you are able and willing to move. Whether it is real or not, start communicating that early so they know they have something to lose. Without that, you have no leverage. If you can get abatement now or a very favorable scenario, do it now.
If you are looking to open a new practice, you may have some good leverage because there are lots of opportunities out there. It’s hard to tell if this will be a tenant market, but there should be more incentives. This process to open a new practice can be lengthy, so it’s a good time to look ahead a bit.
A longer-term lease will give more incentive, so initially doing a 10-year lease is pretty common.
To negotiate the terms, if you can pay the triple nets now, do that so that it shows you are making an effort. If you can defer through May or even June with 12 months to pay back it would be ideal to keep you out of a cash crunch. It’s highly unlikely that you will be locked out, especially if you communicate with them regularly.
To get ahold of him, email him at [email protected]