What small businesses can do now
Extending a lease is a way to get past revenue slump
Gary Montour, senior director with Colliers International, advises both small business landlords and tenants dealing with the loss of revenue from the coronavirus.
Montour said that until now, most force majeure — “overwhelming power” or “act of God” — clauses didn’t include pandemics.
The documents of lenders, insurance companies, landlords and tenants now will be evaluated, and in some cases modified, to include a pandemics clause.
“Tenants need to tell their landlords what’s going on with their business and ask for what they need,” Montour said.
A tenant might be able to extend a lease. If a tenant asked for three months of free rent, a landlord could add three months to the end of the lease term, he said.
Small business tenants should start gathering information about sales from the past year and the past quarter, and compare those to how they look now that the business has reduced operations or closed because of the coronavirus.
“Outline why you need support for a specific time frame, say two to three months. Figure out what you can do — even if it’s partial or half rent — to show that you’re doing what you can,” he said.
" ...tell their landlords what’s going on with their business
and ask for what they need. "
The small business tenant should put the information in writing and note if it is applying for relief from the government.
“I’d wait out the next 15 days to see what the president does,” Montour said March 24.
“Rent’s not typically due until the first or 10th. Evaluate where things are going,” he said.
If the tenant is part of a national chain, a bailout could be coming.
“The landlord will consider how long you’ve been there,” Montour said.
“If you’re a newer tenant and have already asked for rent reductions, your request may be considered differently than someone who’s been with a landlord for a long time and just needs a little help.”
This interview was originally posted in the JAX Daily Record.