No one who works for the Memphis Restaurant Association is a commercial real estate agent or attorney. Please use this information at your own risk and/or consult a professional. Our recommendations are below.
We highly recommend professionally, diplomatically having a discussion with your landlord and keeping a level head. And we recommend having this discussion sooner rather than later. The earlier you start this discussion, the better.
For real estate help, reach out to Shawn Massey with TSCG at 901-461-7070.
If you’re looking for an attorney, please reach out to
Fisher Phillips, Evans Petree, or Waller. (All MRA members.)
This Daily Memphian article gives some more information and examples.
This is a great Memphis Business Journal article with more recommendations. (link here. pdf here.)
Please use the following tips in your conversations:
The most important factor in all of this is who the tenant is and how transparent they are willing to be. You should consider:
- Understand leverage based on size and scope. How big is the restaurant in whatever center, and in the landlord’s overall portfolio? Is it a local landlord or out of town? How much does the restaurant drive traffic to the rest of the center – is it impactful in more ways to the landlord’s health and property if it closes?
- Understand the best and worst-case scenarios for their particular business.
- Understand the current impact on sales/performance.
- Understand what their “ask” really is. This is likely an individual decision and will need to remain in flux as the grounds shift daily. Be very thoughtful about this.
- Understand what their exposure is, provided they need to abate or completely discontinue rent payment, and for how long, or until X happens.
- Understand what BK looks like and how it’ll affect both them and their landlords.
- Seek legal counsel before any decisions are made.
We typically find in these situations that those tenants who are honest and who’ve put thought into their situation will be best suited to work together with their landlord partners. However, the blind “ask” for relief will likely get nowhere.
To close, I understand many lenders are going interest-only for a period of time. So this would be a good question to ask the landlord – are you getting relief from your lender? If the answer is yes – then they should extend relief to the tenant. If not – the landlord should ask for interest-only relief before they say no to a tenant request for the same.
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