A Commercial Property Manager’s Insight During Covid-19
During lockdown in New Zealand I spoke to very experienced commercial property manager Stephen Wong about what was happening out there during this financial uncertainty with most businesses completely closed down for over 8 weeks.
He gave me his insight.
When the lockdown happened according to Stephen, there was a great deal of uncertainty because landlords and tenants of commercial property were reaching out to the government for some sort of guidelines but that didn’t come as early as it did for the residential properties.
So, Stephen said, “We revert back to the 12th edition of the lease agreement which sees in cases of emergency 27.5 that you have to negotiate with your tenants if they have no exit through there when they talk about access. Today we have no exits. In this case, they still have the key to the property, and they still have access to property. It's the government that says No, you can't go. So let's negotiate. It's a share of the costs. It’s a share of the pain,”
As the property manager, you need to talk and negotiate to your tenant and in some cases it has been agreed to everything right down the middle or you manage to negotiate a 25% reduction; so everyone can get through.
But this is on a case by case basis. The important thing to do is you pick up the phone and talk to them. Stephen wrote a blanket email to tenants and landlords and said, “Look, we're here to help. We understand that you are in the situation at the moment so we need to talk about the possible solution for this”. Things like that in times like this; you need to be proactive. You need to keep the communication open.
Generally, businesses are struggling because of the circumstances but there’s hope since at the moment people are buying online. We have a lot of the empty shops around as of the moment but we will recover.
For some landlords, part of the negotiation gives tenants the option of breaking the lease and being released. So it's just a good meeting point between the two parties.
The main thing is, if you are a landlord or a tenant, you really need to start talking to your commercial leasing property manager.
That's why you need a really good agent who is experienced in these sorts of things because they are quite different, quite complex, and all of them are unique in their own way. Stephen has been very busy during C-19 just talking to his clients and customers and working through a fair negotiation process so both parties can find solutions through this time.
To listen to the full-length interview with Stephen Wong about his experience with commercial property leasing during Covid-19 click this link. https://www.goodtonic.co.nz/property-chit-chat
I believe more than ever those who can negotiate will be sort after and the go to people in this strange and changing world that is evolving; to understand your client - what is the talk you need to talk? What the clients background? What matters to them? What is their situation really? - Their immediate needs...A great communicator takes in by listening, watching, monitoring and reading between the lines. Sometimes people don’t want to talk openly at first about the pain that they are holding onto; so listening and asking the right questions in an appropriate way gives the negotiator an overall picture of what is really going on so they can then seek the solution.
Til next time, Lou.