Companies are being forced to prepare themselves for an economic hit due to the coronavirus closing down businesses and keeping people home. Office landlords and tenants are particularly at risk in major markets like New York and tensions between the two are reportedly growing.
Many coworking and flexible firms, such as WeWork and Knotel, have not paid rent at multiple locations for April and are in talks of renegotiating leases. Even more, Knotel CEO Amol Sarva revealed that his company is in talks to give back 20% of its portfolio to landlords and one-third of its tenants have requested rent relief.
“People are going to have to share financial information they normally don’t share and may not be comfortable sharing in order to get all parties involved in understanding the requested relief,” said Michael Lefkowitz, a Rosenberg & Estis attorney. “Typically, office tenants don’t share revenue information.”
Peter Sabesan, Managing Principal at Cresa, said that one national landlord has written to a tenant and outlined the criteria it needs to meet before starting a discussion about help with rent. Although many landlords are offering leeway for their tenants, “some will try and intimidate tenants … Then the tenants will get nasty right back.”
Still, some landlords said that many office tenants have been doing well. According to Marx Realty CEO Craig Deitelzweig, 90% of its office tenants paid rent for April.
