How the pandemic It’s Reshaping Pre-Lease Strategies

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With relatively few real estate companies actively developing and pursuing digital and advanced analytics strategies, such as a pandemic, such strategies help improve tenants “experience and operations. With the advent of cloud-based platforms, companies are making working with the new standard more effective by proactively maximizing the benefits of their leasing strategies and portfolios while promoting savings and lower risks. In the coming weeks, we will publish a series of articles on how the strategies that are evolving and innovative are aligned with commercial real estate – real estate companies have also become more investor-oriented – and incorporate data. In this ongoing series, I will report on how some real estate professionals are adapting to the “new normal” in COVID 19 by taking steps to protect their business now and pave the way for future growth. 

One way to achieve both goals is to approach the landlord to renegotiate the commercial lease – a strategy that makes sense even in times before a pandemic. Increased competition in the leasing business will bring you under control, but at the same time operators may well offer more flexible leasing terms and show more understanding when residents have to terminate the lease. A common option for new leases is to sublet part of the space to another company. 

Although the definition of “insured risk” in a lease is broad enough to cover pandemics, there are clauses in the lease that entitle tenants to suspend the lease following strict procedures set out in the lease. Whether a tenant would be entitled to terminate his lease under these conditions is far from certain. A broader lease provision that relates to the homeowner’s responsibility for the safety of the rented space may support a different outcome. Commercial tenants and landlords should review their leases to determine whether tenants have the right to terminate their lease in the event of forced closure due to a pandemic or other emergency. 

If a tenant agrees to add the equivalent of nine (9) months to the end of the rental period, the landlord agrees. If the tenant’s option to move out at the beginning of the lease expires or he attempts to charge the rent due for the remainder of the lease, the landlord must agree. 

In exchange for providing facilities, a commercial landlord should consider requiring the commercial tenant to ratify the terms of the lease and to acknowledge that a defaulting landlord currently exists in the lease. If a commercial tenant can terminate his lease under this doctrine, it would be a new application to use this concept to allow a tenant to reduce the rent for a period of nine (9) months in response to a forced closure before terminating his lease. A tenant may require that the pandemic be taken into account when deciding whether to terminate the contract. Sources: 2, 6, 9

If success now comes after a pandemic, companies must follow a leasing life cycle that begins before the last payment is made. With this approach to leasehold cycle management, companies behave as if the lease is about to expire before they can decide whether to return, renew, buy or renew. Sources: 0

At the end of a lease or before the start of a new lease, the company must assess what has gone well and what needs to be improved to make it more attractive to new tenants and potential tenants. Organizations start planning by formulating requirements, exploring options, negotiating, and building office space before they move in – in. CRE companies should consider changing user preferences and prepare to adapt designs and develop strategies for room and tenant retention. 

Real estate management companies are now following changing consumer behavior and surviving by implementing business strategies to successfully position themselves for further progress. You rely on online property management as a strategy to adapt to COVID 19 situations. We plan to continue our rapid expansion with the ambitious goal of doubling our business by 2023. Sources: 7, 18

Experts say there will certainly be implications for existing trends in office real estate, including co-working space. CityWay Indianapolis has decided to use virtual tours and virtual leasing technology to involve residents more in their lease negotiations. The strategy pays off by using a virtual tour to give residents a more immersive experience, signing a lease without having to physically interact with staff. 

This scheme reduces costs by allowing companies to reduce their office properties and pay a lower rent. Since a decent proportion of the cost structure is fixed and properties can be let for up to 10 years, it seems very likely that this scheme will reduce costs in the long term, allowing companies to either reduce their office properties or pay smaller lease rates. 

The crisis at Covid 19 has forced rapid and lasting changes, with rapid changes in policy in the areas of telemedicine and liquor. It is now time for homeowners and landlords to begin implementing existing emergency management and continuity plans for businesses, and to develop new strategies to address serious public health events. 



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