Busting Your Lease – the Next “Pandemic” Wave to Come.


Before I forget…see the image above….If you’d like a sweet, stainless thermos from The Space Place, please shoot me a note with your full contact info. Happy to send you one. Those articles pictured? All available for free on our website, TheSpacePlace.net.

MILLIONS OF TENANTS around the world, companies and professional firms just like yours, having been facing down their landlords since March, 2020….looking for relief, for a way out, trying to terminate their leases for office space they neither want nor use but in all cases — determined that the office environment isn’t safe from Covid contagion. Metropolitan America has become a ghost town and for good reason. Scientists, HVAC experts confirmed that it isn’t safe to breathe in office buildings — no matter the type of MERV system you’ve installed. But what are landlords doing about it?

Source Webinar: “Is it Safe to Inhale in an Office Building?” Video.

Speakers’ Slide Deck. Dropbox.

Unless you’re in an unusual circumstance where your force majeure lease clause allows you to forego paying rent, your landlord has kicked back hiding under the blanket asserting that you owe every penny of rent — or else. It’s the “or else” part that portends the upcoming wave of abandonments. Those tenants left standing at present have been milked since last March for unusable, unsafe space. How many more months can tenants withstand this financial abuse? We know from 35 years of leasing experience that the vast majority of tenants aren’t litigious. But forces being what they are, scores of legal cases around the country are pending — to determine if/how any tenant may invoke Covid-concerns to terminate their lease. A clever pending case we’re aware of claims for the tenant that Covid contagion constitutes “Damage” and that unless/until the damage is repaired, the tenant’s rent shall abate….and eventually enable the tenant to terminate the lease. Meanwhile landlords will wipe down surfaces and take your temperature before you dare entering the building. Don’t ride the elevator; they have no air conditioning whatsover. Temperature? Boiling.

San Francisco Office Space by the Numbers:

  • Pre-Covid space available / on the market: 10M square feet. Today? 23M square feet.
  • Year-end 2020: Total net-absorption of space: Negative 6.37M square feet.
  • 4Q 2020: 18% available space. Total net-absorption of space: Negative 1.94M square feet.
  • Only 85 total transactions reported in 4Q — the lowest number ever recorded.

We’re here to help you, tenants. That’s all we do. Occasionally a client asks us to recommend service providers to them — such as real estate counsel. We’ve published a list of Recommended Service Providers of all types on our website. Please feel free to call me with any questions or comments. If you seriously need a break, try listening to my first record album called 70 Westbound….just out, under band name Dan Moss. Enjoy and stay safe. Cheers.

After reading through this Market Editorial, please see our collection of educational articles we’ve written for our tenant community.

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If Your Lease Will Expire Within The Next Three Years…

Or if there is another compelling reason to discuss your firm’s office leasing situation, please call us. For qualified tenants, we offer the following pre-contract services:

  • Free preliminary office lease and operating expense review;
  • Free consultation to discuss project management, Team formation and project schedule;
  • Market surveys and our specific tenant-driven leasing recommendations ; and
  • Assistance in selection and coordination of all Team members throughout planning and negotiation phases.

Vacancy Rates: Are your options SOARING?

Tenants should watch carefully to detect how and to what extent your field of options changes. Which size blocks of space are getting leased? Tenants ask, “How many choices do I have?” Yes, your options are soaring as a result of the Covid economic downturn. Review the chart and let’s discuss.

How many blocks of space are available for YOU San Francisco County (June 2020) San Francisco County (Q4 2020)
5,000-9,999 sq. ft.  350 478 (up 37%) 
10,000-19,999 206 251 (up 70%)
20,000-29,999 69 103 (up 49%)
30,000-39,999 23 33 (up 43%)
40,000-49,999 16 23 (up 44%)
50,000+ 47 82 (up 74%) 
You can request a free space survey, containing all direct and sublease space meeting your specific requirements. We can also provide building photographs, floor plans, leasing histories, and more. To discuss your space needs in person, call 415-434-2820 or email Dan@TheSpacePlace.net
Five Brokerage Firms Control 8M SqFt of Space Listings in 440 Buildings Listed: How Do You Spell “Conflict of Interest”?

When we approach a prospective new tenant client, we tell them that we NEVER represent landlords, always avoiding this conflict of interest. So, which of our competitors—leasing firms—do the most landlord representation? Who’s marketing 78% of the space in San Francisco?

The top companies controlling the most space available are NOT landlords….Rather, they are office leasing brokerage firms acting with the landlord’s interest in mind. They are:

Cushman & Wakefield

Newmark, Cornish & Carey

These brokerage firms control over 61% of all listings and are beholden to more than 440 local landlords, paid to drive up rental rates and drive down concessions for tenants.

Since their allegiance is committed to so many landlords, how can they possibly represent YOUR interests—the tenant’s interests—objectively and aggressively?

Thank You to Our Clients & Friends

We believe that representing tenants – and only tenants – is a noble cause, our specialty for over thirty years. We greatly appreciate our clients’ confidence and kind words about us, our level of advocacy and enthusiasm to negotiate aggressively ….. and mind the details while guiding the leasing process. Thank you!

505 Montgomery Street, Suite 1100
San Francisco, CA 94111
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