Landlord Pandemic Negotiations

Anne shares how she and her team at SolidCore survived COVID by creatively negotiating with landlords when their studios were forced to close.

"During COVID, we knew what would kill us wasn't the lack of revenue - it was if these landlords sued us and made us pay rent. No one really understood who was right or wrong. Was this force majeure? How do you expect us to pay rent when we have no money coming in?

We decided we had to get the landlords on our side. We had to figure out ways to restructure deals that didn't require rent payments while we were closed. We couldn't just kick the can down the road. With 75 studios, there was no way we could recover if in a year they said 'You owe rent for those 3 months, give us a check for $90k.'

So we came up with strategies like lengthening lease terms - we'd add another year or two to the back end of the lease so they'd have a longer tenant. Or we'd increase the rent in years 8, 9, and 10 to make up some of the difference.

People talk about how COVID killed so many gyms. A lot of that wasn't just because of COVID - it was because of operational and financial decisions that weren't made as smartly as they could have been, and not understanding what was actually going to be their demise."