{"id":1004034878,"date":"2011-12-07T11:33:03","date_gmt":"2011-12-07T19:33:03","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004034878"},"modified":"2022-12-09T01:13:33","modified_gmt":"2022-12-09T09:13:33","slug":"blending-and-extending-net-lease-agreements","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/blending-and-extending-net-lease-agreements\/","title":{"rendered":"Blending and Extending Net-Lease Agreements"},"content":{"rendered":"<p><strong>By Randolph T. Mason, <\/strong><br \/>\n<em>Senior Vice President &amp; Partner, Lee &amp; Associates Commercial Real Estate Services<\/em><br \/>\n<a href=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2011\/12\/Net-Lease-Randolph-Mason.jpg\"><img loading=\"lazy\" decoding=\"async\" data-attachment-id=\"1004034879\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/net-lease-randolph-mason\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2011\/12\/Net-Lease-Randolph-Mason.jpg\" data-orig-size=\"140,150\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;}\" data-image-title=\"Net Lease &#8211; Randolph Mason\" data-image-description=\"\" data-image-caption=\"\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2011\/12\/Net-Lease-Randolph-Mason.jpg?w=140\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2011\/12\/Net-Lease-Randolph-Mason.jpg\" alt=\"\" title=\"Net Lease - Randolph Mason\" width=\"140\" height=\"150\" class=\"alignright size-full wp-image-1004034879\" \/><\/a><\/p>\n<p>Many of my clients are asking me how they can reduce their facilities\u2019 rent. I often tell them to focus on the blend-and-extend concept, so we\u2019ll look at what tenants need to know before considering an early-lease renegotiation.<\/p>\n<p>Before space occupants brainstorm how to utilize this strategy, four criteria should be met. One, the amount remaining on the lease term should be at least 50 percent or less. Two, there needs to be a gap between a tenant\u2019s contractually scheduled rent as compared to the current market rent. Three, the tenant needs to be creditworthy. And four, the tenant should have a desire to stay in the building at least three or more years longer beyond the current lease\u2019s expiration. Furthermore, tenants wanting to shed excess space may find this strategy a potential cost-saving opportunity.<\/p>\n<p>Landlords won\u2019t consider reducing a tenant\u2019s rent simply to be nice; the terms need to make sense for them also. As in all negotiations that require a long-term relationship, the outcome must be a win-win scenario. Landlords must reap the value for an early renewal by stabilizing the asset, and tenants must receive a rental reduction in order to extend the term.<\/p>\n<p>Tenant benefits include an immediate rental relief, the opportunity to secure early tenant improvement dollars, perhaps enjoy free rent, shed excess space, reset the operating expense base year, repair HVAC problems outside the CAM charges, and other areas that may be of concern to the tenant. Landlord benefits could include stabilizing the landlord\u2019s cash flow, avoiding market competition when the lease expires, limiting re-tenant costs, and perhaps increasing the value of the property.<\/p>\n<p>It needs to be mentioned that blend-and-extend negotiations involve some form of art and tact. Tenants who enter into the negotiations do not have as much leverage as compared to tenants with leases expiring in six to nine months. It is important to understand the make-up of the landlord and know which areas are important to him. Negotiating early-lease renewals or blend-and-extends can be challenging. Investment strategies vary from landlord to landlord and not all landlords will adapt therefore the correct amount leverage and finesse needs to be demonstrated at the correct time.<\/p>\n<p>A correctly negotiated blend-and-extend, especially in the net-lease space, can result in a renewal that benefits all parties and solidifies the long term tenant and landlord relationship.<\/p>\n","protected":false},"excerpt":{"rendered":"<p><strong>By Randolph T. Mason, <\/strong><em>Senior Vice President &amp; Partner, Lee &amp; Associates Commercial Real Estate Services<\/em><\/p>\n<p>When clients are looking to reduce rent on their facilities, I often tell them to look at the blend-and-extend concept. <\/p>\n","protected":false},"author":1201,"featured_media":1004034879,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1004034878","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v24.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Blending and Extending Net-Lease Agreements - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/blending-and-extending-net-lease-agreements\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Blending and Extending Net-Lease Agreements\" \/>\n<meta property=\"og:description\" content=\"By Randolph T. Mason, Senior Vice President &amp; Partner, Lee &amp; Associates Commercial Real Estate Services When clients are looking to reduce rent on their facilities, I often tell them to look at the blend-and-extend concept.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/blending-and-extending-net-lease-agreements\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2011-12-07T19:33:03+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-09T09:13:33+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2011\/12\/Net-Lease-Randolph-Mason.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"140\" \/>\n\t<meta property=\"og:image:height\" content=\"150\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Nicholas Ziegler\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/blending-and-extending-net-lease-agreements\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/blending-and-extending-net-lease-agreements\/\",\"name\":\"Blending and Extending Net-Lease Agreements - 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