retail credit tenant wants 1 year extension at discounted rent. Might be difficult to rent in short term.

Is there a downside other than the lower rent? If they then decide to stay and renegotiate loner term lease our starting point will be much less. But at least I know I have 1 more year occupied.
Any thoughts on this matter.
In Leasing Property - Asked by doug s. - Oct 22, 2016
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Chris R.
Broker/Agent
Denton, TX

no other real downside if your owner is long term owner and you are in a market area where if it becomes vacant might take a while to re-lease to new longer term tenant and the thought is that in the next year either the market will improve such that there might be more demand from a new tenant and/or chance you could extend the current tenant for longer term renewal. Obviously with tenant turnover there is the cost of loss of rent, leasing commissions, possible repairs and improvements to the space to attract a new tenant and possible rent concessions to / for the new tenant. As they say - bird in the hand worth 2 in the bush. . A reasonable discount concession to keep the tenant in place may be in the owner's best interest unless you are in a hot market - which I suspect not.

Oct 26, 2016
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