Let's start at the beginning.
I located a building in an up and coming area of Galveston's Historic downtown. A recent influx of new bars and restaurants as well as being the thoroughfare for new developing areas make it a prime location. I got the property under contract and even found a prospective tenant. He is the head chef at a restaurant I was a manager at for a while. We wanted to open his second restaurant and move from his job as the head chef at a higher end restaurant on the island. He signed a Commercial Intent to Lease and we moved forward. Everything went smoothly and we recently closed on the property!
Tonight we were meeting up to finalize the lease. As a lot of tenants do, he was wanting to negotiate before finalizing the lease..... I was ready to hold his feet to the fire and stay firm. It was a great opportunity and I knew I could find a new tenant if necessary. Then I get the text. The other restaurant which his wife ran was robbed and his wife was shot twice in the chest!! He is with her at the local hospital and she is in surgery!
Now I'm in this situation. I truly feel for him! This is a business though. I don't even know if he is going to be able to move forward if he wanted to now. The other restaurant will be down their head chef and he will have some major hospital bills. What do I do?? Do I hold out for a while to give him a chance? Do I put it on the market to cover myself? While the Letter of Intent isn't a binding contract, we did have an agreement! Advice?!
wow.. I think you pray for the wife and if it was me I would let him make a decision.. tell him its his call.
he can punt no problem.. or if you need me to hold it for a few weeks I am happy to do that..
what a sad situation.. but it probably depends on your personal financial situation as well. you may not be able to afford to give any slack.. or you may care not to.. just really depends.. me I bend over backwards for them.. but that's me and usually in these situations I am in the vast minority on the " this is a business cut no slack BP landlords :( )
I'm definitely willing to do what I can. I've actually worked with him before. Back when he was working on building his credit back up due to stolen identity, I bought a house for him to rent. Once his credit was stable he then bought it back from me.
This was supposed to be a great situation where I made a good return and he got to make the restaurant of his dreams. I just don't know how long to wait. There is no appropriate amount of time to ask him to make this decision after this has happened. While I can ride it out a while at the current burn rate, do I bring it up or just wait for him?
I will definitely be praying for him, his wife, and their family! It is definitely uncharted territory and thought it would be nice to hear different people's opinions. Thanks!
Wow. How horrible.
I like what @Jay Hinrichs suggested. I would give him a couple days to come up for air then just talk to him.
Maybe send him a text (sorry this happened, you must be freaked, anything I can do to help, etc)
Then next week start a dialog.
Do whatever lets you look at yourself in the mirror tomorrow morning. I'd wait and see how things turn out. You've already said that you can get another tenant if necessary.
Wow, what an incredibly unfortunate situation.
I too would give him the ball and let him decide. If he's a good friend he won't screw you over. To "CYA" if you will, I would probably start doing some light marketing of the space. I'm a "prepare for the worst" kind of guy, so I would like to have a few potential people ready right off the bat in the even that he calls me and tells me it's a no-go.
I can't say that I've had a situation this intense, but as a property manager in CT I always try to keep a few tenants in my back pocket in case the originally accepted one backs out. Never know what can come up.
Especially since it sounds like you have a good track record with this guy I would give him a little bit to deal with his situation and circle back with him on the rental. Hopefully things work out. There is no playbook for this kind of situation and I think you are handling it well.
I would give him a couple of days to decide but immediately put it back on the market. You can always pull it off the market if he can commit quickly otherwise you do him a huge favour by not holding him to his commitment and protect yourself at the same time. Help the guy out by letting him know you are taking the pressure off of him by relisting while at the same time still giving him first option to proceed.
Horrific...I can't even imagine the stress that family must be going through.
I like @Jay Hinrichs ' suggestion. In situations like this, I like to ask the person on the other end how they'd like to handle it. I don't know your market, but typically a commercial space is tougher to fill than a residential space. He might ask you if you can wait a couple weeks or so until he has some clarity on how things will turn out for his family. On the other hand, he might tell you to do whatever you have to do and maybe this isn't a priority for him any longer. Who knows, maybe the stress of dealing with this pending lease is adding to his plate and it's more than he can handle right now, it could be a blessing to let him off the hook.
In any occasion, if you can live with whatever his request is, it might be best to let him give you some direction and work with that in order to make this situation as easy on his family as you can.
Good luck, awful situation.
@Timothy Church Seems like you have pretty good relationship, a proven record on his side to uphold your trust. I would definitely HOLD for few weeks. It is also an uncharted territory for him as well. His wife has survived and god was looking out for them so stand by them. This will soon pass, he will probably make a decision for you but give him some time and offer to help. Looking for new tenant will cost you four weeks anyway. In a long term if he goes for this like planned, you will be much better off with him.
I'm happy to say she is home and stable! I informed the tenant to take his time and be with his family. He is planning on closing the restaurant his wife was running next month and shift focus over to the new place.
Still a long way to go and they will definitely be needing prayers.
@Timothy Church Sounds like the best of all possible outcomes. He might have success selling the other location through a business broker, letting him come out in better shape than just nailing the doors closed.
There are times when - as long as you can survive it - money isn't the only consideration. This sure seems like one of them.
God bless them all.