Commercial Leasing Risks in a 38% Vacancy Market

Posted October 12, 2026 in Media

Transcript:

00:00:03

[music] Commercial leasing right now is a tight market. You know, on both sides, you you have a lot of risk. Tenants are signing long-term leases, five and 10ear leases with personal guarantees in some cases. So, you know, they have to perform as a business and pay that full rent or they’re going to pay for it personally when they get out of their lease or breach their lease and don’t pay. There are significant risks for a business who’s being financially stressed due to the economic conditions and isn’t able

00:00:36

to pay their bills. There can be significant stresses for the landlord, too. Whereas several years ago, landlords could be more flexible with late payments. They could make deals with with a tenant. With that kind of vacancy, they may have the financial stress as well where they can no longer give you a grace period. They have to evict you and they have to pursue damages to make it. So, I think both parties, you know, whether it’s a commercial tenant or a commercial landlord, are are incentivized to turn

00:01:06

things into a legal battle a lot quicker than they used to be. And it’s just the nature of the game right now. So, that risk involves litigation costs, attorneys fees, you know, possible damages and things like that. and uh possible eviction, a lot of loss of revenue during that period of time when a when a matter is being litigated. You know, potential bankruptcies. You know, tenants might end up filing a bankruptcy and that could put a huge strain on on the landlord and what they’re able to

00:01:36

recover. So all of these are huge risks and I think there’s just a lot of litigation that could ensue.

This transcription was AI generated.