A Solution For NYC Restaurants: Reverse Standard Percentage Lease
Can my NYC restaurant enter a percentage lease for rent payment?
In a letter posted on Doughnut Plant’s website, owner Mark Israel wrote about a difficult decision to temporarily suspend operations, writing their goal “is to have a long-term solution with our property managers, not be another ‘number’ shuttering its doors.”
“Small businesses need help and more support. Restaurants have lost more revenue and jobs than any other industry. Fixed expenses have remained the same but as we all know, business is down. NYC in particular has been hit hard: people have left and people are staying home (including tourists).
Doughnut Plant doesn’t want to be part of the problem — landlords and property management companies are also bearing the brunt of the pandemic. By temporarily suspending operations our goal is to have a long-term solution with our property managers, not be another “number” shuttering its doors.”
Many business owners find themselves in a similar situation where the only path forward is coming to the table with the landlord or property management company to come up with a mutually beneficial solution. Our firm has continued to focus on helping restaurants and tenants survive COVID hardship and emerge with a path forward that works for them.
One creative solution we’re structuring is a reverse of the standard percentage lease. You as the tenant open your books to your landlord and structure rent payment tiers based on revenue; below a certain threshold, you pay $0 in rent and above that pay, a proportionate share of your current rent based on actual revenues.
Landlords are more willing now than ever before to move forward in this way. They are avoiding being “just another vacancy” and are eager to come to the table with the mutual goal of long-term success for your restaurant, customers, and staff. We’d be happy to share details on what we’ve seen work with a percentage lease if you’re interested.
In a May interview with Gothamist, Israel said, “I’m trying to let go of that as things will never be the same because of the pandemic. But that’s always been true of New York. It’s always changing and adapting. We’re in the moment, dealing with the circumstances the best we can. Times of crisis always call for new ways to keep going forward. I love New York City.” We all love New York City and its ever-changing nature; now is the time to change how we structure our leases, so you as the tenant are protected during this time and any future unforeseen events.
If you are interested in hearing more about the reverse of the standard percentage lease and if that would work for your restaurant or business, please feel free to call Vicus Partners’ Founder Bert Rosenblatt 917 862 8820 or email him at firstname.lastname@example.org.
Continue Reading:NYC Restaurants Prepare for COVID-19 Recovery