Financial Packaging Blueprint Rent Relief

FINANCIAL PACKAGING BLUEPRINT
FOR RENT RELIEF

August 15, 2024
Shane Minnis

silicon valley commercial real estate broker

You never get a second chance to make a first impression…

Assuming you want to get a great deal and maximize ROI on your next lease I’m going to help you make a solid first impression 🙂

A fundamental component of putting your best foot forward is providing a clear and compelling financial picture to landlords to address their risk concerns up front.

This helps you in multiple ways, such as:

  • Higher likelihood landlords will lease space to you.
  • Supports better terms (particularly security deposit, tenant improvement allowance and other concessions).
  • Differentiates your offer against competitive offers for the same space.

If your company is experiencing hardship and you’re in need of rent relief as a lifeline… I recommend gathering and considering the following information as soon as possible to be prepared when opportunities arise…

And to get a leg up should you find yourself in a competitive situation:

1) Start Here

First, for additional background, insights, and helpful resources read my blog post on Tenants Negotiating Rent Relief.

2) Your Narrative

My recommendation… be transparent and candid. This can be in the form of a formal letter or an email, either way you should write it down so your landlord knows you’re serious and prepared. It doesn’t have to be long either, but it should summarize your current situation, the concession(s) being requested, how the concession(s) will support the continuation of your business and ultimately why the landlord should consider this request.

3) Supporting Details

Prepare any documentation or other objectively verifiable means that support your narrative – such as your sales pipeline report, accounts receivable, etc.

4) Outside Relief

Have you tried to secure outside relief (such as federal, state or private options)? If so, provide details.

5) Financial Statements

Last 2 years + year-to-date income statements, balance sheets, and cash flow statements for the entity on the lease. It would also be helpful to gather current bank statements.

6) Personal Guarantees

Is this something you’re willing or prepared to provide? If your business is a new venture and/or self-funded then don’t be surprised if landlords request personal guarantees.

7) Personal Financials

Last 2 years tax returns, current financial statements. Don’t be surprised if your landlord requests you complete a credit application and runs a credit check.

8) Business/Profitability Plan

What’s your business plan to regain profitability over the next 12 months? Simple and high level will work fine.

9) Projected Financials

What’s your current burn rate? What’s your plan to reduce expenses? Do your projected financials support your business/profitability plan?

10) Concession Repayment Plan

What’s your plan and anticipated timeline to repay landlord for the requested concession(s)?

11) NDA

If you require a non-disclosure agreement (“NDA”), then you’ll want to have this prepared in advance.

12) Other

Any other helpful details, insights, further descriptions, background or experience of investors/partners, materials, etc. The main goal here is to tie everything together and showcase your financials, team and investment outlook in the best possible light.

While the above information isn’t necessarily required, it will certainly help position you for the best deal possible and mitigate potential landlord concerns. Feel free to reach out with any questions, comments or to discuss further.

Dedicated To Helping You Get A Great Deal + Maximize ROI On Your Next Lease,

– Shane Minnis

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Disclaimer: The views expressed on this website/blog are mine alone and do not necessarily reflect the views of my employer, Colliers International. The information furnished has been obtained from sources I deem reliable and is submitted subject to errors, omissions and changes. Although I have no reason to doubt its accuracy, I do not guarantee it. All information should be verified by the recipient prior to lease, purchase, exchange, or execution of legal documents.

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