Most tenants and landlords operate under the belief that once their lease is signed that neither party would be willing to change it. After all it’s a lease - a legal document - the contract between the landlord and tenant, a “historic documents” like the Declaration of Independence or the Bible. It was drafted by several brilliant lawyers and should never be altered by mere mortals!!

Think this through and you reach the opposite conclusion. The lease document represents the agreed position of both parties at a point in time. Change is certain and the relative positions of each must have changed as both moved to the current point in time. Can you change the lease? YES YOU CAN, but you first need make a realistic determination of what has changed for both parties, what negative events have or are about to happen to each and what actions you can take to avoid these unpleasant future events.

The trick to all of this is understanding the landlord’s needs at a point in time vs. the tenants needs at the same point in time. This could be today or at some point in the future (i.e. the upcoming renewal.) What do you have to trade? How much is it worth to both the landlord and tenant? What can you get of equal value? When that point in time arrives, you then bundle both needs in a package and present them to the respective party.

In order to do this you need to put on the opposite hat. Be the landlord or tenant; look around the center where your store is located. What is wrong or missing? How could you make more money from the real estate? What do you need to achieve a higher return on your investment? What or who stands in your way?

I recently represented a tenant who wanted to close or reduce the size of a poorly performing store. They believed that the landlord would have to be paid to a fee to accomplish their goal. The lease imposed significant use restrictions on the landlord. When the lease was signed Kmart looked like a good long term bet, but now it was vacant. They were both at a new point in time but just did not realize it. We were able to recognize this and lead both to a more comfortable new point in time. The landlord got relief and was able to divide the vacant store into three new tenant spaces. Our client got her store size reduced and the rent for the remaining space was reduced well below the market value of the space at NO cost to my client.

So next time your store or shopping center is in a bad place, give some thought to your new point in time and where your respective party stands. Can you change the lease to recognize the new point in time?
– YES YOU CAN!

Jerry King
jking@rent-research.com
Rent Research Consultants, Inc.

Al Gore’s movie and Nobel Prize, Kyoto, green credits, demand response, wind farms, smart grids, record oil prices and the list of reasons energy is such a hot topic goes on and on. Venture capitalists poured over $148 billion into clean energy technologies last year alone.

According to a Wall Street Journal survey of the Fortune 1000 annual reports, over 65% of these companies have the support of the CEO and Board for clean energy initiatives.

It’s a dizzying sea change of activity in the energy markets that will affect the next few years and beyond in ways we have never seen before. The impact on multi-site organizations is being felt from the bottom line to the boardroom to store operations and beyond. Focus on energy management from commodity procurement, facilities management, environmental controls, utility program management, and the myriad of options for efficiency projects and incentives, not to mention the swarm of vendors knocking on the door, is creating unique issues for multi site companies. The need for help in sorting this out, tracking it and making sure the performance and return on investment is captured has never been higher.

Join Peter Weigand at AMTdirect’s 2008 User Conference for a discussion on clean energy technologies, current and pending regulatory changes and key trends that will impact your organization in the very near future. Also learn how AMTdirect is getting involved to develop technology aimed at helping multi site companies manage their energy programs.