How to Terminate Your NYC Office Lease if You Don’t Need the Space
“We don’t need our space, and I want to terminate my NYC office lease, what can I do?”
The pandemic decimated the lives of many, and businesses have been no exception to the detrimental effects. Despite the comeback that we’re seeing, especially here in New York City, many business owners are still struggling to stay afloat and figure out the best path forward. If you (like many others) are saying to yourself “we don’t need our space, and I want to terminate my NYC office lease, what can I do?”, the good news is you’re not alone and we’ve successfully negotiated hundreds of these. Here’s how:
It’s possible to terminate your NYC office lease for a fraction of the remaining lease obligation – and now is the time to do it.
The NYC office lease market is coming back to life after a tumultuous downfall during the pandemic as companies look to return to work in NYC in a full or hybrid capacity. If you are one of the many companies continuing to experience financial hardship, you can terminate your NYC office lease for a fraction of your remaining lease obligation. We’ve negotiated many NYC office lease termination agreements where landlords have agreed to accept 20% – 60% of the remaining lease obligation (example: we negotiated a termination agreement where the Landlord accepted a $300k payment, including the tenant’s security deposit, on a $6 million remaining lease obligation).
As one Landlord we know succinctly put it: “I don’t want to spend 5 pennies to try to make 1”. Landlords (like anyone) want to avoid the overwhelmed court systems, and in many cases would rather try to re-rent your space to a new tenant that can pay the rent than spend years in court trying to collect from a company that can prove financial hardship related to the pandemic. The key to a successful lease termination in our experience has been the strategy and communication. We’re here to share what we’ve seen and negotiated to figure out the best strategy for you and your landlord.
I’ve proposed terminating my NYC office lease and my Landlord won’t work with me. What can I do?
Move out. We know it sounds extreme, but we’ve seen it work for NYC tenants as a last resort strategy when communication has failed (but we’re not lawyers, so talk to your lawyer before taking any action). Physically vacating the space can send the message that you’re not bluffing about terminating your office lease; some landlords believe that the longer a tenant stays in their space, the more likely they will be to decide to stay and pay rent — which for some landlords is a reason not to negotiate. Demonstrating that you are willing to leave sends a powerful message and can be the jolt needed to bring even the most resistant landlords to the table.
The Takeaway:
With vacancy rates at the highest we have seen in recent history, landlords will do almost anything to keep tenants in their buildings. So if you’re looking for a way out, it’s always worth the conversation with them to see how easily you can break your lease. If they aren’t willing to work with you, extreme steps such as moving out (again…we are not lawyers, so please consult your legal team before taking action) can be discussed to communicate what’s best for you and your business.
How We Can Help:
Because we only represent tenants and never landlords, we have both perspective and experience with lease terminations that few are willing to articulate. Other brokers won’t share the possibility of breaking from your lease agreement early, especially if they’re representing the landlord as well.
Contact us:
Please contact our founder Bert Rosenblatt at brosenblatt@vicuspartners.com if we can help you terminate your NYC office lease.