Real Estate costs are the 2nd or 3rd largest line item for most companies. Things to consider:
First, talk to your insurance provider to see what coverage you have. Business interruption insurance might be a possibility if you have it. We asked if it would cover the current situation to commercial insurance folks, and the answer is, it depends. Some policies clearly exclude pandemics, others don’t.
Second, call your property manager/building owner and tell them what position you are in. Communication is key. You aren’t the only one. The property managers we have discussed this with are busy fielding these exact issues and concerns. Let them know your needs and your specific request. Some owners are being flexible, some aren’t, and many in between. They need details to figure out how to best work with you.
Third, look into SBA disaster recovery loans. Open to companies under 500 employees.
Finally, if changes in your business aren’t temporary, and you need to reduce your real estate footprint, here are a few options:
- Facility assessment – existing space functionality – what do you have and what do you need
- Recast your lease: This will take some time to work through with the landlord. Figuring out the best win/win is a process. Committing to more term is likely part of the equation.
- Consider subleasing all or a portion of your space: We don’t know how deep this slowdown will go just yet, subleasing is about cutting losses, get aggressive to move the space quicker.
Remember to communicate. We’re happy to discuss these and see how we can help.
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Tanner Mason is the Manager Broker of Benchmark Commercial Real Estate