In the real estate world, there is little doubt that the economic fallout from the COVID-19 pandemic will persist for years. As long-held assumptions about work, offices, retail — and, indeed, cities themselves — are being fundamentally tested, commercial leases have seen rapid and precipitous losses in value, with turbulent repercussions. Especially in New York City, large numbers of tenants are balking at paying high rents for drastically underused space, while landlords — under pressure from their own lenders — demand that leases stand as written, with rents paid in full.
With trillions of dollars in such leases at issue in Manhattan alone, our litigators are now regularly asked to present innovative legal arguments to resolve complex commercial landlord-tenant disputes. Representing both commercial tenants and landlords, we have developed and litigated arguments that have broken new legal ground.
Experience Across the Board
While these new types of pandemic-fueled disputes currently dominate our caseload, we remain known for our strengths in resolving every sort of real estate dispute, especially at the high end of the New York City real estate markets. We have vast experience guiding clients through all types of litigations and arbitrations relating to leases, including disputes arising over building repairs, operating expense escalation, tax escalation, fair market value renewal options, brokerage commissions, as well as more commonplace nonpayment and holdover proceedings. We also handle Yellowstone injunctions as well as a wide range of construction disputes, including mechanics’ lien defense, foreclosure defense and fire code and criminal violations.
Encouraging Modifications
From our vantage point, we can confidently predict a deluge of high-stakes disputes, which will fundamentally change how the real estate industry conducts business. Consequently, we see a pressing need, where possible, to negotiate modifications in current leases that clearly cannot function as they were intended. Financially strapped tenants turn to us to find ways to shift the leverage in matters where the pandemic has made it impossible for them to operate as anticipated at the time they negotiated their lease. At the same time, we advise our landlord clients to come to terms with the new reality, to see the value of keeping the tenants they have in a rental market that is spiraling downward — all while protecting their interests and rights under the written lease and its language. While the object is to avoid costly litigation, in all cases, we work with our clients to find the best business solution in a fraught situation.
