How much should I offer now versus 4 months ago
I am looking to rent a 5,000 square foot retail building in the sf Bay Area for my business. I approached the owner 4 months ago and we were on the way to doing a long term deal-no paperwork had been signed yet- at $1.25/sq ft. It had just become unoccupied.

Then Covid happened. My business dropped to half its normal level and I put off trying to move, but now we’re up to about 75% of precovid. I want to get on track to occupy this building because I know long term it’s the right decision and business should keep trending toward normal levels as the Covid situation matured toward its end.

Still there is a lot of risk involved for me to move when business isn’t yet at 100% of precovid. I certainly don’t need the new building at this point but it would provide marginal benefit and like I said, it’s right for me long term. I also must take into account that more spaces may come on the market in the next year or two that I would not be able to rent if I rent this one.

I want to approach the owner and get the same deal we negotiated before but reduced rent. I’m wondering if this is something that is happening now in the commercial real estate world. I know most people are stupid with their investments, and that would indicate the owner might not want to budge on price even though that’s irrational.

So what should I offer of before I was at $1.25? Comps are thin, I haven’t seen any deals like this being done in the market where I’m in during the Covid era. Thnks in advance.
[{"id": "fwtmyvc", "text": " i mean,  how long is. the lease for?  or why not negotiate step/bump ups over the course of the lease?    also, from a landlord pov,  i'd suggest if you think the space will be difficult for them to fill... add fire power (justification) with any data about slow down in foot traffic or such, all angles pointing to lowering rent.  $1.00-$1.15/ft. sounds like it's NOT in the city exactly...", "replies": [{"id": "fwxk8u5", "text": "Agree with the step ups. There is a valid reason to negotiate. Maybe try to get 75% of the rent for the first year, then step up to the previously agreed rent. 75% is equal to three months of free rent. You can approach it either way, getting three months free up front is obviously better than 75% over a year, but the difference is not much if you plan to honor the lease for the full year.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fwtnl0f", "text": "Lease is for an initial 10 year term with two five year options. We already had negotiated 3% a year increases in base rent. It\u2019s also NNN. It\u2019s in the sf Bay Area so not in the city.", "replies": [{"id": "fwtymuy", "text": "The person you were trying to respond to has no idea that you did because you made a top level comment instead.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fwtqg8x", "text": "Even Tenants with existing leases are renegotiating long-term leases right now. Play hard ball, asking for a 25-30% discount. Winds are in your favor.", "replies": [], "depth": 1}, {"id": "fwtrt70", "text": "is that $1.25 per foot per month in base rent? so $15 psf in base rent per year? Landlords usually love deals where they dont have to do any work or provide any inducement, can usually negotiate lower rents based on that.", "replies": [{"id": "fwtzkxj", "text": "Yes $1.25 per foot per month in base rent.", "replies": [], "depth": 2}, {"id": "fwu5tqy", "text": "Yes CA quotes are per month", "replies": [], "depth": 2}], "depth": 1}, {"id": "fwu0wjc", "text": "Your probably more likely to get them to give you more free rent, then lower the base rent on a long term deal.", "replies": [], "depth": 1}, {"id": "fwynaz0", "text": "I would request free rent but take it in the form of a discount on rent for the first 5 years. Your payment will still be lower but the owner won't worry that they are signing a lease that they will regret in 10 years.", "replies": [], "depth": 1}]