For the past six years, MPS Law associate Holly Shuman has focused on real estate transactions. A rising star within the field, Holly recently sat down to talk about MPS Law’s unique approach to representing tenants and the future of commercial leasing.
Tell us a little about yourself, and how you became interested in commercial tenant leasing.
I went to Michigan State University and studied political theory. I always knew I wanted to go to law school, and after visiting the City of Chicago, I decided to go to Chicago-Kent College of Law. During law school, I started at MPS Law as a law clerk, and after I graduated, I joined the firm as an associate. I quickly discovered that I wanted to focus my practice on real estate law. I like how everyone is working toward the same goal – getting the lease signed or the deal closed. You also get to see the subject of your work. I love when I tour a tenant’s premises and see the finished build-out for a lease that I negotiated.
How is MPS Law’s approach to commercial tenant leasing unique?
In commercial leasing transactions, the landlord almost always provides the initial lease draft, and by representing tenants, we’ve seen just about every kind of lease you can imagine – from simple 10-page agreements to massive documents of 200 pages or more. As soon as we see the initial draft, we have a good idea of what sort of landlord we’re dealing with, and because we have reviewed so many different form leases, we are hardly ever surprised by any lease provision.
We have also developed a process for lease negotiations that helps us finalize the lease in a timely manner. First, we insert our comments (and our client’s comments) into the landlord’s draft lease. After we receive the landlord’s revised draft, we create an open issues memo detailing the lease provisions that we believe require further revision. The length of the memo depends on the complexity of the lease and on how receptive the landlord was to our initial comments. We use this memo to discuss the open issues with our client first, and then, we revise the memo for transmittal to the landlord. It provides some insight on the reasons behind our comments and can also act as an outline for a call with the landlord team. We find that through the memo, we can get better results for our clients than if the parties continued to repeatedly exchange lease drafts. Further, when the premises are small or the lease forms are short, we can typically resolve all open issues in one call. Once the parties have agreed upon the memo issues, one side revises the draft lease to reflect those agreements, and the lease draft is ready for execution soon thereafter.
What about clients who don’t know or understand everything they need in a lease?
We advise our clients on all sort of leasing issues, from buildouts to maintenance issues to expense audits, so we have found many different ways to make a lease better for any tenant. We also have developed tenant leasing guidelines that help us ensure that concepts important to tenants in general are incorporated into all of the leases that we review, and if we haven’t worked with a client previously, we make sure to get to know their business and needs. For example, we have one client in Canada located in an area that gets lots and lots of snow, and during the winter, their business demands getting the snow plowed early and often. As a result, we made snow removal a priority in their lease and were able to negotiate, in very precise terms, how early and how often their landlord would plow the parking areas.
What does the future of commercial tenant leasing hold?
I think tenants in the short-term will be looking for more flexibility in their leases because many companies are now having their employees work from home or in a hybrid setting at this time, and they do not know when, or if, their employees will ever return to the office full time. To accomplish this flexibility, we expect to see more short-term deals or more tenant options in leases (such as early termination options and contraction and expansion options). Right now, it is also a more tenant-friendly leasing environment, so tenants should be able to secure better economic terms with new leases or lease renewals.