It's now or never! Talking to your landlord could be the key to your business survival
Talking to your landlord is never an easy thing, what about in times like these! When attending webinars and meet-ups organised regarding the coronavirus outbreak, we have noticed that many of the flexible workspace operators still have not reached out and talked to their landlords.
Below are some quick tips that we have gathered that will help you in making this first step if you have not acted as yet.
Talk to your landlord as soon as possible. Your landlord has got more than one tenant (you) and he/she will probably receive plenty of requests, so it is always good to be the one that comes first. Landlords are prepared for such requests, so do not hesitate!
Be ready: your landlord can ask you about all sorts of financial data like your books, exports from your management system, forecasts or even your personal bank statements. Be prepared and show every evidence that your business is viable whilst explaining the current situation and why you are trying to negotiate.
Under-promise and over-deliver.
Most of us are optimistic about the situation and we believe that sooner than later our life will come back to normal. That is why most people tend to over-promise, which is often hard to deliver. Today, it is time to under-promise (backing it with data - like potential cancellations or occupancy reports) so your landlord can understand the severity of the situation. The key is to deliver or exceed the expectations, rather than feeling sorry and renegotiating the terms of your agreement in the future. Remember - always be honest.
Talk with your landlord directly if possible.
It is not very well seen by landlords to get contacted by your attorney while you always used to communicate directly. Make sure you can speak with the landlord directly, preferably via the phone/conference call but always follow up with the written communication to keep the evidence of any agreed actions. An attorney can be useful if you are talking to a very large organisation.
Offer to pay as much as you are able in the current situation.
Do not hurt the trust of your landlord by straight away refusing to pay due to the current crisis. Be empathetic and understand that many of your landlords do have mortgages, bills and family to take care of. Prepare your books and see how much you can afford to pay. It will pay off later!
Some landlords are lucky to have some sort of support either from banks or the governments, which can make your conversations easier.
The length of the lease is part of the negotiation too.
Landlords often agree on reducing rent for a period of time or deferring partial payments for a later date. If that is not the case, you can pick up as well the topic of length of your lease - it may appeal to the landlord if he/she does not want to give the rent reductions straight away. We all know that finding a new tenant is connected to quite high costs so the longer you stay, the better for your landlord too.
Help your tenants, so they can help you.
Various governments or councils/states have programs that either helps you with grants or help your tenants. Even if you cannot get a grand for yourself (for various reasons), you can help your members to survive this time. By being there for them, you increase the chance that they will help you by staying within your community and keeping their membership.
Find people who will support you.
A landlord that does not want to talk? You may want to check for the best practices in the communities around you or find other tenants having space with the same landlord. We are stronger together! Check if your local government is providing some help or if there are some laws reinforcing rent relief. There can be some charities now offering helpful services for free in your local area.
In the UK, independent workspaces are now building the case to receive government support. Join the effort by filling the form on the London Coworking Assembly website!
Not enough tips?
If you want to watch more resources on this topic, we highly recommend the following webinars, where not only you can hear the coworking spaces perspective, but also the views of landlords and investors:
GCUC - How to have the right conversation with your Landlord https://www.crowdcast.io/e/gcucgio/register
GWA - How To Talk With Your Landlord During A Crisis https://vimeo.com/402818458/2f5b102444
GCUC - Contracts & Negotiations with a Real Estate Attorney & Coworking OG
The GCUC team shared brilliant, relevant content and kept participation high with breakout sessions; ensuring that there were still chances to network and spark interesting discussions with one another.
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