Why Won’t the Landlord Reduce My Commercial Space Rent?

When you see a commercial real estate space (retail, warehouse, or office space) sit empty for months you would assume that the landlord would reduce the rent to get it leased out ASAP.  If the space was located in a down market you might have a pretty good chance of getting a sweet deal.  However if the space is located in a “HOT” market then you have a much less chance of that happening.

What are some reasons why a landlord will not reduce commercial real estate rents?

  • Some are just stubborn and not willing to negotiate
  • Some have a mortgage on the property and the lender will not allow them to do so
  • Maybe the commercial property was just sold and the new owner has enough cash to float it until the right deal comes along
  • Maybe the property is in foreclosure and the bank is still holding the title
  • If they reduce the rents it may lower the value of the property
  • Many commercial real estate properties have more than one tenant.  Even though one space has been vacant for a long time the property has enough rent coming in from the other tenants for the owner to make money.  Because of that owners are willing to wait for a tenant who wants to pay their rates
  • Owners don’t want to have to hear from existing tenants who find out that their neighbor’s rent is half the cost of theirs.

 

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