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How Fitness Studios Can Negotiate With Their Landlords During Coronavirus
For many fitness studios, negotiating with your landlord to get a break on payments during Coronavirus feels like navigating the Bermuda Triangle in a pedal boat. It’s scary…
What if they say no?
What if they say they’ll evict me?
What if this becomes a legal battle?
Rocco Fiorentino and Ty Brewster with Keyser Co., a company that specializes in advising commercial real estate deals, not only give detailed insight into how to engage your landlord in negotiations, but they also role-play some common landlord objections.
How Should Fitness Studio Owners Approach Their Landlords
If you notice this conversation is happening with your landlord over email, STOP.
“I would take this out of email as much as possible and speak to them over the phone,” Ty says. Instead of engaging in email, focus on being human with them. The key to remember here is, you’re both struggling right now…
Simply email them and say you’ve spoken with them before and you’d really appreciate or that you’d be more comfortable with having this conversation over the phone.
Most landlords are good people and won’t bully you into submission. It’s important to remember that. You’re both struggling. So, approach the conversation with seeking help and with empathy for their situation as well.
Know Your Value To The Space You Occupy
As a tenant, you bring the space value. You’ve never missed a payment, you’re an outstanding tenant and neighbor, and you’re business has just been pummeled by something completely out of your control. That does NOT mean your landlord owns you…
You’re not a poor, starving Oliver Twist saying Please, sir. May I have some more. You’re in a business relationship with your landlord.
“The way you ask is even more important than what you ask for. So you can’t call with an attitude and say If you don’t work with me, I’m out of here. That won’t work,” Rocco says. Instead…
You want to do your best to create a relationship with the landlord without acting as though you’re powerless to their demands NOR in control. This needs to be treated as a symbiotic relationship where you both understand that you’re BOTH going through this and you BOTH need help.
When you ask, what will they say?
Common Landlord Objections During COVID-19
When you ask for three months of relief from your landlord, you’re likely to get hit with some objections. But remember (A) this is a negotiation and (B) they’re struggling too.
Here are some of the things you’ll hear and both Rocco and Ty address them in an incredible role-play:
Why don’t you use the Payment Protection Program or a Government Load to make your payments?
Why don’t you just have your insurance policy cover it and cut me a check?
How about you make this month’s rent payment and come up with a plan for how you’re going to pay me back and then we’ll decide from there?
What if we waive the next 3 months, penalty-free, if you agree to a 5-year lease at a 28% increase?
I can let you off the hook for the next 3 months but you’ll have to pay it all back on August 1st.
We’ll let you slide for the next 3 months, but you’ll have to pay it back within the next 3 months.
…these are just some of the objections fitness studios might hear from their landlords and they can cause things to negatively escalate into anger and emotion. Your goal is to avoid that.
“Understand that the real prize is getting through the conversation and coming to a conclusion that works for both parties so you can get through this together,” Rocco says. Once you go down the path of anger and name-calling, the negotiation is not only lost, you might find yourself in a legal battle you never intended to fight.
Watch the video to see how Rocco and Ty handle these landlord objections
What’s In It For BOTH Of You?
“Be prepared and let your landlords know that this is where you want to be,” Ty says. The fact is, you’re a good tenant and you want to be there… and, when this is all over, you want to sign a new lease with them. Let them know that.
While this is a business negotiation, remember you’re talking to a human being that’s seeing their revenue drop as well. You’re both looking to save money, so the last thing you want to do is have to hire an attorney.
Rocco says it’s important to “understand that the real prize is getting through the conversation and coming to a conclusion that works for both parties so you can get through this together.”
Your goal is something that’s mutually beneficial so you can both get back to normal when this pandemic is over.
Depending on your situation, Ty and Rocco are offering you a free consultation to help you through your negotiation. If it’s more complicated, they’ll have to charge a small fee.