Covid-19 is Affecting CRE Lease Negotiations. Here’s what Experts are Seeing

Article originally posted on Phoenix Business Journal on May 3, 2021

How will Covid-19 affect the future of commercial real estate? It’s a multibillion-dollar question that’s been debated since the start of the pandemic.

With many businesses still plotting their returns to the office, the answer remains to be determined.

But experts say the effects of Covid-19 are likely to reverberate in the industry for years to come, and commercial lease negotiations — particularly those over the next year — are likely to provide some early clues about the pandemic’s effects.

Industry experts have a few ideas about what to expect. Especially in the short term, experts say it’s likely tenants will have more leverage to negotiate terms. That’s particularly true for larger tenants and those that draw other tenants or customers to a property.

One potential area of focus is specific clauses in leases that could provide protection in the event of a future pandemic.

Maria V. Bernstein, a real estate attorney at San Francisco-based SSL Law Firm LLP, expects more discussion around force majeure or unforeseen circumstances clauses in the wake of Covid-19.

Find the Complete Article Here: