The CRE Termination Clause... And why it may not work
[{"id": "cvqbc3s", "text": "&gt; *I recommended a solution this week that gave both the tenant and landlord a fair alternative. We adjusted the term to a shorter span and tied in future lease rates into a couple of options to renew.\n&gt; \n&gt; The tenancy was provided the ability to leave but the landlord also negotiated his terms down the road. If the tenant stays, the landlord has already determined a satisfactory return*\n\n \n I hope you repped the tenant on this.  That in no way helps the landlord.  \n \n IMO the appropriate response to that situation from the LL side, provided you want to do a short term lease, is \"ok we can do a short initial term.  When your lease is up if we haven't found someone more long term we can talk about where the market is then for renewal terms\".  \n\nA tenant having an option to renew doesn't help the landlord.  They haven't prenegotiated shit.  It sets a CAP on what they can get.  Most landlords I've seen will not even discuss negotiating a renewal until the option notice period is past for this reason.  \n\nI realize this is probably blog spam, but god damn that is horrible horrible advice to give people", "replies": [{"id": "cvrdm5r", "text": "I appreciate your comments. As I noted near end of the article, this advice only works if it's fine for both sides. Without knowing the circumstances of the tenant or landlord it's not fair to say this is horrible advice. In this case, I represented both sides, achieving an outcome that was suitable to both. The covenant of the tenant is strong and we believe they will stay. We had originally approached the landlord on a longer term and negotiated the lease rates with him. That is why tying in rates worked on this scenario; you're right, typically we would not include them and let the market indicate them down the road.", "replies": [], "depth": 2}], "depth": 1}]