NOW IS THE TIME FOR LANDLORDS AND TENANTS TO WORK TOGETHER TO SECURE THE FUTURE
Published 26 March 2020
There can be no doubt that we are living in extraordinary times – and getting through such times is going to require some out of the ordinary thinking and behaviour from all of us in business.
Few commercial property investors will be untouched by what is happening. Many will have tenants whose own position has been rocked massively by the crisis, and for those in sectors like hospitality and retail, their ability to trade at all is likely to have been removed.
Inevitably such businesses are now turning to their landlords for help in riding out the storm, often asking for rent holidays or new payment terms such as paying monthly rather than quarterly in advance.
Of course, the landlords themselves have their own costs to cover, whether that is lending against the property or ongoing management and staff costs.
But these are not ordinary times, and the extent of the crisis means that everybody is going to have to start thinking in a different way. Landlords are going to have to think long-term; they have a role to play in ensuring that the businesses which are their tenants have a sustainable long-term future once the immediate crisis has passed.
The alternative is contributing to the destruction of many otherwise viable businesses, and that is in no-one’s interests. Trying to re-let empty properties during the recession which is sure to follow the pandemic will not be easy.
The best landlord/tenant relationships are genuine partnerships, where each recognises the mutual benefit in a stable and sustainable arrangement. That means that in times of trouble there needs to be flexibility on both sides – and no-one could claim these aren’t times of trouble.
We are already seeing tenants asking for rent holidays, but offering long-term benefits to the landlord in return; that is how the best partnerships work. And we are seeing landlords accepting that they have a role to play in getting us all through this horrible situation.
There is no one-size-fits-all solution. But we really are all in this together, and for landlords that might mean sharing in some of the short-term pain of their tenants in order to secure their long-term future.
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