As COVID-19 sweeps through America’s major metropolitan centers, commercial real estate companies are required to adapt to quickly changing times. Commercial real estate agents in New York City, the current hub of coronavirus pandemic in the United States, have worked through government-imposed social quarantines by temporarily pausing showings and tours of properties. Commercial property managers have also been busy working with current tenants to renegotiate terms of leases and rent to help companies who aren’t making any money right now.
On the other side of the coin, companies who are looking for a commercial property to rent have also are required to adapt to corona virus-directed quarantines that forbid real estate companies from hosting tours of their properties. Instead, prospective tenants have utilized virtual tours and floor plans to hopefully find a space that will work well for their company’s needs. According to a commercial real estate agent, William Montana, his company has used floor plans and virtual tours to show off the commercial spaces his company has for rent.
Getting Creative with Rent Payments
Another way commercial real estate companies are getting creative during the COVID-19 pandemic is by delaying rent payments. Unfortunately, there are so many companies that have been forced to shut down because of COVID-19. Because these companies are not open, they cannot pay rent to their property managers.
Commercial property managers are trying to be sympathetic with their tenants, often having frank conversations with worried business owners who are struggling financially.
Instead of evicting businesses, commercial real estate companies throughout New York City are deferring rent payments now and extending leases on the back end, so that companies can pay when they are making money again.
Another option some property managers are utilizing is a so-called “blend and extend,” where the lease is not only extended, but the real estate company also gives their tenants free occupancy for an agreed-upon period.
Through it all, commercial real estate agents based in New York City and many other of America’s big cities recognize that every landlord-tenant situation is unique. Commercial real estate firms are trying their best to be flexible with their tenants, but are also realistic about the potential for things to extend into the legal realm if some tenants fail to start paying their rent when life is back to normal.