Retailers Stiffed Landlords in April Hoping to Get Better Rent
Herrick partner Dena Cohen was quoted in Crain's New York Business discussing the renegotiations between landlords and tenants in the time of COVID-19.
The article states, "retailers both big and small are holding out rent and seeking more agreeable terms for the pandemic." Dena, who has represented a wide range of prominent landlords and tenants in retail and office leases across the country, commented, "Tenants are not paying rent as a general rule... Both the small retailers and national brands are not paying."
While the situation varies from lease to lease, some landlords are holding the line demanding payments from their commercial tenants, but many are willing to negotiate. Dena offered that, "one popular option is to have the tenant pay whatever they can toward April, May, June rent and then have whatever isn't paid spread out over a longer period of time... That can ease the burden the tenant feels now and still make the landlord whole."
Dena also commented on the force majeure conversation adding, "There will be a lot of litigation over this... But even in cases where leases do have these clauses, paying rent is almost always excluded from force majeure."