Give Up the Ghosts
February 18, 2025 • As we move through 2025 — a year likely to be characterized by volatility — to improve the odds that you can maintain high-performance leasing results notwithstanding the likelihood of unexpected curve balls, it will be essential that your legal leasing process is as adaptable as possible.
To supercharge that adaptability, Watch Item #10 on our 2025 Watch List: Give Up the Ghosts, provides meaningful guidance, although in this case, it means getting rid of dinosaurs.
Getting Rid of Dinosaurs
In one fell swoop, you can significantly improve your leasing velocity, value creation, and bottom line by transforming your dinosaur form lease — that decades-old document that includes every landlord-tenant issue your company has ever faced — into a modern 21st-century lease.
Unfortunately, when either party to a leasing transaction clings to their time-worn form lease, both parties 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. Countless hours and dollars will needlessly be spent to craft a landlord-tenant framework that reflects the current market and the agreed-upon terms.
A recent example of a dinosaur form lease that slowed negotiations to a crawl involved a large NYC financial district office lease with a credit tenant. Notwithstanding that the financial district is suffering from the highest rate of available office space in all of NYC (28.2% in Q2 2024 according to Savills), the landlord held onto outdated provisions and positions (some of which were designed for multiple-building suburban office parks in other parts of the country) that could not be explained away by their attorneys. The result: wasted time and money, a delayed rent stream, a frustrated tenant, and a deal that almost toppled more than once.
In addition to solving this problem on a case-by-case basis, as we did for our recent financial district tenant, we’ve been working side-by-side with our clients to modernize their form leases so that the threat posed by these dinosaur throwbacks is forever relegated to the dustbin of history. 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 in the long run.