Great article featuring Whitebox Real Estate/TCN Worldwide:
Before You Break That Lease Over COVID-19, Negotiate First, Brokers Say
Kerri Panchuk of Bisnow talks to Grant Pruitt from TCN's Dallas office, Whitebox Real Estate/TCN Worldwide, about how conversations with your broker should take place before tenants breach a lease or abandon a property.
The temporary shutdown of businesses nationwide due to COVID-19 prompted commercial real estate tenants to search their leases and insurance contracts, looking for ways to break up with their landlords in the event of financial hardship…Experts who survived the last recession say a lease modification strategy — while never a sure thing — is better than running a scorched earth campaign between tenants and landlords.
“You have to remember, we work with attorneys and there are a lot of great attorneys out there,” Whitebox Real Estate co-founder and President Grant Pruitt said. “But real estate brokers don’t get paid by the hour. They get paid by coming up with solutions, and so the concern is if you hire a litigator, you are going to get a huge bill regardless of what happens. You may not have a successful resolution, but you are still going to have a huge legal fee. That is why you really want a good tenant rep.”
Pruitt with WhiteBox said landlords need to show their own lenders strong occupancy numbers throughout the life of a loan and consistent cash flow, and these two things could prompt landlords and lenders to ease up on tenants for a short period of time as the market adjusts.