Starboard TCN Worldwide Announces Lease Modification Services
Jul 15, 2009
In today’s economic climate many businesses are facing declining sales by 20 percent or more from the time they originally signed their lease. With the prospect that sales will stay flat or continue to decline for the rest of this year and the next, businesses everywhere are trying to figure out how they can renegotiate their budgets to pay the rent. Landlords also have worries in this economic climate. Many are seeing tenants fail or come knocking on their doors for rent relief. Starboard TCN Worldwide offers a new service aimed at assisting business manage rental costs and keeping tenants in place with a lease modification service know as ‘Blend and Extend’.
Starboard TCN’s commercial real estate professionals set our service apart by taking the time to validate the need for a reduction. Many owners have their leases rates tied to the financing of their buildings so they have little room to work within to assist their tenants through this downturn. However, the prospect for both the tenant and the landlord is worse if the tenant’s business fails and they have to vacate the building. We work to provide the necessary information to a landlord to go to their lenders or investors to support such a move.
Who is qualified for a ‘Blend and Extend’ lease modification? Typically you are a candidate if your firm has seen sales or revenue cut by 20 percent or more. Our real estate professionals will evaluate your business in a variety of ways. Looking at the tenant’s ability to pay rent and if the business is financially strong enough to continue business through this down cycle, we will then create a matrix to present to the landlord.
Through our negotiations with the landlord we aim to lower your current rental rate for the period remaining in your lease term to an affordable rent level based on your finances. In exchange we will offer the landlord an extension of your existing term to make up the loss in rent as a result of this reduction. To fill an office or retail vacancy landlords typically have to wait three months or more before a tenant is secured and rent is collected, ‘Blend and Extend’ eliminates this potential period without rent income for the landlord.
If tenant improvements are required that vacancy could last considerably longer. Landlords also contribute in most cases to tenant improvements have to pay brokers attorneys architects and other service providers fees to secure the tenant etc. By extending the lease we calculate possible loss of revenue as part of our matrix that we present to the landlord on the tenant’s behalf. This gives everyone the ability to learn that it is in the best interests of both the landlord and the tenant to consider seriously a lease modification.
If you are interested in this service please contact us at 415-765-6900. We would be more than happy to send one of our qualified agents to see if your firm would qualify.
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Written by: Hans Hansson
Hans Hansson is President of Starboard TCN Worldwide Real Estate Services as well as a member of the Board of Directors for TCN Worldwide Real Estate. Hans has been an active broker for over 24 years in the San Francisco Bay Area and specializes in office leasing and investments. If you have any questions or comments please email firstname.lastname@example.org or call him at (415) 765-6897. You may also check out his website, http://www.commercialspacefinder.com/.