Getting Rid of Dinosaurs
As we move with our clients into one of the busiest times of the year, we’ve noticed that the intensity with which we drive ourselves to produce extraordinary results often gets in the way of taking a step back to evaluate whether we’re working smarter, or just harder.
So we thought this would be a good time to share one of our Moments of Truth strategies for working smarter to minimize the time, cost and risk of getting commercial leases over the finish line.
Each of the ingredients that go into the Black Box of the legal leasing process: the landlord and tenant teams, the attorneys, the letter of intent and the form lease has a profound impact on the timeliness, costliness and riskiness of the process.
Don’t Let Dinosaur Forms Derail Your Leases
While the attorneys and principals are carefully selected and letters of intent are carefully scrutinized before they get into the Black Box, what gets carelessly tossed in is the form lease, which is often a decades-old repository for every leasing issue with which the party generating it ever dealt.
Both landlord and tenant suffer as a result. It doesn’t matter whether you’re the 800 pound gorilla who gets to impose its form lease on the transaction (unless the other party signs it without reading it) or the 90 pound weakling on the receiving end. Both parties will spend countless hours and dollars to craft a landlord/tenant framework that reflects the deal to which they agreed. No wonder so many leases take too long, cost too much or get derailed along the way.
A recent example of a thoughtlessly used form lease involved a ground lease for the development of a fast food restaurant in the parking lot of a shopping center. The landlord attempted to use a form lease created for leasing existing space to small retail tenants. The tenant responded with its equally inappropriate form lease. We were called in to resolve the battle of the forms, and did so by creating a lease both parties could embrace.
Getting Ahead of the Black Box
In addition to solving this problem on a case by case basis inside the Black Box, we’ve been working with our clients outside the Black Box, so that the threat of a dinosaur form lease is eliminated.
To do this, we’ve created a methodology to update and streamline form lease relics into 21st century frameworks for lasting landlord/tenant relationships.
It’s an all-hands-on-deck process. Input and buy-in from legal, leasing, operations and construction are essential. When all is said and done, it’s a great way to create value both inside and outside the Black Box.