Economy may drive some to negotiate

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By Tim Tresslar, Staff Writer 10:39 PM Saturday, May 16, 2009

With high unemployment and a slow economy squeezing consumer spending, some retail property owners may find themselves faced with a tenant who wants to negotiate a cheaper lease.

On a national scale, the retail market likely still has a rough six months to a year ahead of it, said Edward Mermelstein, a New York real estate attorney and investor. Daytonians may recognize the Mermelstein name; Edward co-owns 30-story Kettering Tower in downtown Dayton with his brother, Uri Mermelstein.

And with times tough, some tenants — at least large national ones — are trying to get cheaper leases when the current pact expires, he said. Companies that want the lower rate will have to prove financial hardship with the help of such documents as financial or bank statements or tax returns, he said.

“Obviously, there’s a process to all of this,” he said. “No one is just going to lower the rent.”

Locally, Kelly Gray, a vice president with Richard Flagel Realty, said incidents of tenants trying to amend leases remain scarce.

“We’ve seen a little bit of people asking to do some renegotiation, but not an abundance of it,” she said.

But during the last week or so, she has begun seeing some positive signs in the market, including more property showings and the inking of a couple of office leases, she said.

Those on the hunt for space have included businesses wanting to relocate and start-up companies scouting for a place to set up shop, Gray said.

The one constant: “People are extremely price conscious,” she said.

Staff writer Tim Tresslar covers commercial and residential real estate for Dayton Daily News. His Real Estate Notebook appears every Sunday. He can be reached at (937) 225-7317 or via e-mail at ttresslar@coxohio.com.

REAL ESTATE  NOTEBOOK

Tim Tresslar

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