1. If it triggers trouble with the owners bank then discussions with the bank are important and the first step.
2. Rent reductions, in markets with decreasing occupancy and lowering of ask rents, will be a fact of life and necessary to retain tenants. One should look at the overall goals and review cost saving opportunities in operations.
3. I would craft a plan that includes rent escalators in the second and third year as this may turn the corner and business improve. Having these will allow the landlord to review the business performance annually.
Dec 18, 2008