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Rising Interest Rates May Push Your Landlord into Survival Mode

Feb 2, 2023

Guest Post by Sara Stanley, MCR, Managing Director at Commercial Tenant Services, Inc.

Low occupancy and higher interest rates are taking a toll on many landlords to a level not seen in decades. Loans are coming due (record maturities) and revenue drops are directly upsetting many landlords’ stability.

How are these events affecting office tenants? 

Tenants are seeing creative tactics landlords are taking to hold onto their properties, including maximizing cash flow, through service reduction and increasing billing to remaining tenants, whether appropriate or not.

Tactics from landlords:

  • Demanding phone calls rather than putting responses in writing 
  • Providing some documents to tenants then refusing other information (limited transparency) 
  • Hiding behind Audit restrictions. Some landlords fear experts reviewing their billing methodologies 
  • Significantly overinflating estimated billings, perhaps never to be reconciled under their watch 
  • Slow to pay past due credits when established 
  • Delaying responses, whether due to landlord turnover, ‘lost documents,’ timing interfering with their internal deadlines, etc.
  • Providing estoppel verbiage which attempts to waive restitution of past overcharges or may excuse landlords from past overbillings 
  • Changing management and billing methodologies  

If you recognize one or more of these events, a comprehensive Lease Compliance Review may help reduce spending and increase cash flow.

Sara Stanley, MCR, is Managing Director at Commercial Tenant Services, Inc.

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