COVID-19 Guidance For NYC Tenants: Paying Rent, Cleaning, and Office Reopening
A Note from the Vicus Partners' Bert Rosenblatt on Rent Payment Solutions and Navigating the 'New Normal' for NYC Tenants Post-COVID-19
Over the last few weeks, my team and I have been working with NYC tenants from all industries impacting by COVID-19 and NY Pause to help them navigate their “new” normal and structure solutions around the most pressing challenges right now. While each situation is unique, we wanted to share with you some general guidance we’ve shared around these topics; for each topic, we’ve partnered with a trusted resource to help you deep dive into a solution and answer questions at no cost to you. Please reply to this email if we or any of the below resources can help.
What Should I Do About My Rent Payments?
Every lease and landlord is different, but we’ve seen unprecedented levels of cooperation between Landlords and Tenants over the past few weeks and remain confident there’s a solution for each situation. Your lease may have specific provisions for circumstantial deferred rent or rent abatement during times of material business interruption or revenue loss; if you don’t, we are here to strategize on a solution that works for you and help you communicate with your Landlord. Whether or not your Landlord is a financial supporter of your mission, collaboration on a beneficial solution is better for both parties.
Some solutions we’ve seen work:
3-6 months of deferred rent now, to be paid back beginning in 2021
3-6 months of free rent to be added to the end of your existing lease
using your security deposit as rent payments now, to be replenished later
a new ‘blend and extend’ lease (see next section), where you receive multiple months of free rent and a taxes reset to $0 in exchange for extending your lease
for restaurant or retail tenants: renegotiating your existing lease to a “percentage lease” to appropriately reflect the ongoing hardship (for restaurant or retail tenants); in short, this uses your current cash projections (taking into account COVID-19) to structure rent tiers with your landlord – you pay no rent below a threshold and pay a proportionate share of your normal rent based on revenue.
We’ve partnered with our trusted friends at Golenbock Eiseman Assor Bell & Peskoe (GEABP) to look at your lease to summarize your rights and answer questions on an off-meter basis (at no cost to you). Please let us know if this is helpful to you and we will connect you to them.
How Should I Think About My Lease Longer Term?
For tenants who have less than 2 years left on their lease, we’re structuring lease renewals using what we call blend and extend terms: you sign a longer term lease now and in return for the commitment receive:
free rent to be used immediately to cover the coming months
taxes reset to $0; as part of any lease, you should pay $0 in the first 12 months – this is your taxes base year
favorable base rent relative to pre-COVID market conditions
If you’re looking to stay in your existing space, this ‘blend and extend’ is a solution that solves for both the tenant and the landlord’s needs right now, and one we are happy to work with you on implementing if you have less than 2 years left on your lease.
If you’re looking to move, 1.6 million feet of sublease space hit the NYC market last quarter. Now more than ever before, there’s likely a sublease space solution that works for you and your organization and a sub-landlord willing to make a deal. Please send us a note if you’d like to discuss space options available to you and a go forward strategy.
How Will New Social Distancing Guidelines Change My Office Design?
Our “new” normal will force every business owner to rethink office layout and design. First, new social distancing guidelines suggest 300 square feet per employee vs. 175 square feet per employee before COVID-19. That doesn’t necessarily mean people will be taking up more space, but it does mean that organizations will be rethinking their flexible work policies, office layouts, and general company operations to fit this new normal. As you think about your adaption plan, we’ve put together some information on How Flexible Working Will Change Our Office Spaces (After COVID-19) and 6 Office Design Trends In Post-COVID-19 World that delves into the future of offices post-COVID-19.
We’ve partnered with our trusted friends at Schrimmer Design and Lebel & Bouliane to help you with a post-COVID space plan and answer any questions you have at no cost to you. Please let us know if this is helpful to you and we will connect you to them.
Are There Simple Steps I Can Take to Prepare My Office for Return to Work?
In addition to rethinking flexible work policies to adhere to social distancing guidelines in a way that works efficiently for your business, we’d encourage you to think about simple cleanliness measures you can take to help your employees feel safe in your space. Here are 8 Ways to Help Protect Your Office Space from Coronavirus and Future Pathogens.
One top of mind topic with business owners right now is how to clean their office spaces in preparation for return to work. We’ve partnered with our trusted friends at Cleaning Service Industries, who recommend using a fogging process that sanitizes your entire office with a non-toxic disinfecting mist (and is the solution that helped the Wuhan Province reopen). They’ve agreed to answer any questions you have at no cost and give you a discount should you be interested in their services. Please let us know if this is helpful to you and we will connect you to them.
We hope any or all of the above is useful to you as you–like us–continue to navigate COVID-19 and the new normal we’ll face together as we return to work. We remain committed to being your unwavering advocate and your partner in long term success. Please contact me, Bert, at brosenblatt@vicuspartners.com if we can help you come up with a proposed relief plan to discuss with your Landlord, answer any questions you have about the state of the market, connect you to GEABP, Schrimmer Design Group, LeBel & Bouliane, or Cleaning Service Industries.
In good health,
Bert
