Remote work paradigms, catalyzed by the COVID-19 pandemic and solidified by what, in the estimation of many market watchers, appears to be the new normal, are redefining the 21st-century workday and shifting the way commercial parties view their lease negotiations.
Prior to the pandemic, the confident tenant might have scoffed at the need for contraction rights: the option to reduce the term and/or the square footage at some point during the term of their lease.
Commercial tenants, hoping for the best, had typically entered lease negotiations with the opposite goal in mind, determined to obtain typical extension rights — a right of first refusal, right of first offer or renewal right — in order to have the option to increase the size or duration of their lease. The pandemic, however, has taught us an important lesson: Good things can come in smaller packages.
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