Hello neighbor,

I'm struggling with downtown rent and will have to close EverLocal at the end of July.

Since I have to close the store, I could still be responsible for approximately $90,000 in remaining rent under my lease.

I do have an agreement in place that would allow me to fully exit the lease and avoid that remaining rent — BUT ONLY IF I can make the required rent payments through July.

Any support would be appreciated.

May July

Commercial leases are complex. This is a simplified explanation.

Ways To Help Me Get Through July
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Opinion & Personal Experience  —  This article reflects the author’s perspective and personal experience.

Q1

What’s up with the revolving door of vacancies?

Most people blame the rent.

They're not entirely wrong. But rent is only the visible part of the story.

The real story is buried inside the lease.

Beneath every storefront is a contract that determines what happens when a business struggles or doesn’t work out.

Most people never see that part.

Here's what it looks like, and who it hits hardest.

An iceberg illustration showing RENT above the waterline labeled 'What most people see', and below the surface a locked lease agreement.

Who signs it

The businesses that make a downtown worth visiting are also the most vulnerable.

The coffee shop that took over an empty corner. The boutique carrying things you can’t find anywhere else. The bookstore that stayed open. The restaurant that became the reason people started coming back to that block.

These are your neighbors. They’re the people who give a downtown its character.

These are independent operators — single owners, first-time entrepreneurs, people who are the business. Not franchises, not chains, not businesses with management teams and legal counsel behind them. Some business owners work with brokers or attorneys during the leasing process. But even with help, many small business owners sign pre-written lease agreements drafted by the landlord — with far less experience, leverage, and negotiating power than the landlords and property managers on the other side of the table.

Four small independent business owners standing in front of their downtown storefronts.

How the contract works

An income stream for one side. No matter what it costs the other.

Many small business owners sign leases that place most of the financial risk on the tenant. Landlords typically work from a standard lease template used across their properties — a document drafted to serve their interests and refined over time. Some surface-level terms may be open to discussion: a reduced deposit, an adjusted start date, a concession on the first month’s rent. But the terms that define the real risk — who is personally liable, under what conditions the tenant can exit, how costs are passed through — those terms rarely move for small business owners without negotiating leverage. The terms that matter most often remain untouched.

The result is that many small business owners face a take-it-or-leave-it decision. If they want the space, they accept the structure. The cost of entry isn’t just paying for the space. It’s accepting a structure that places most of the risk on the business owner.

A funnel diagram illustrating how commercial lease obligations flow from the tenant to the landlord.

The tenant’s obligations flow into the lease from multiple directions. What comes out the other side, for the landlord, is a single, contract-protected income stream. In many cases, this is backed by the owner’s personal assets — their savings, their home, much of what they own outside the business.

At signing: one party has a contractually defined income stream. The other's is entirely unknown. If the business succeeds, the lease gets paid. If it doesn't, the person who signed still owes — not the business, not the LLC. The person.

Small businesses fail at predictable rates. But leases are written in a way that doesn’t account for that fact.

Roughly 1 in 5 new businesses closes within the first year. Many don’t reach year five.

Four open storefronts and one closed storefront, illustrating that 1 in 5 independent businesses closes within its first year.
An independent business owner at the counter of an empty café.

The mismatch

Small businesses are fragile. Many leases are rigid and unforgiving.

The lease was signed before the business served its first customer. At that moment, the landlord gets a contractually defined payment stream — a fixed amount, on a fixed schedule, for three, five, or even more years. The person opening the business may have done everything they were supposed to do: write a business plan, study the market, estimate sales, calculate expenses, and take the risk seriously. But projections are only estimates. They are not money in the register. Revenue can fall short for reasons that have nothing to do with the business itself — foot traffic drops, road construction blocks access, a recession reduces consumer spending, a pandemic changes everything. The small business owner has to absorb those uncertainties in real time. The lease often does not.

The lease doesn’t flex. Whether the register is full or empty, the person is still required to pay.

When a business struggles month after month, the pressure compounds. When cash flow gets tight, the lease has already shaped the conversation — it defines what is owed and holds the small business owner responsible for it. That structure tends to see only two states: you’re paying, or you’re not — even when the reality is much more complicated and alternatives could change the outcome.

That structure doesn’t leave much room for alternatives or solutions — it creates pressure for payment.

Q2

Is this normal? Is this how it's supposed to work?

Most people I talk to are surprised how one-sided the standard structure is.

The commercial real estate industry already knows of lease provisions that can reduce the damage when a business struggles. Those ideas are not new. They are discussed and sometimes utilized in commercial leasing — yet they are often absent from the agreements presented to small business owners.

There is often no built-in middle ground for the business that is struggling but not yet failed. The result is a high-pressure, black-and-white agreement: either the rent is paid, or the business has fallen behind and the penalties can start to cascade.

Here’s what that actually means for the people in our community who sign these.

An independent business owner walks away from a closed storefront with months of rent bills trailing behind them.

Closing doesn’t always end the story

The storefront goes dark. The lease may not.

The business closes, the keys go back, and most people assume the story is over.

In some leases, falling behind on rent can trigger a cascade of consequences — including the possibility that the landlord may pursue years of remaining rent at once. Imagine being unable to make rent — and then learning that closing the business could mean being pursued for $30,000, $50,000, or even $100,000 in remaining rent.

Many leases provide no structured path out. Once a business begins struggling, there is frequently no built-in process for reducing obligations, restructuring terms, or creating an orderly exit. The hardship can continue until the landlord agrees to release the tenant, or finds someone else willing to sign the same lease. Nothing in many standard leases requires the landlord to release the tenant, even when the tenant’s situation is fully visible.

In some cases, this creates an outcome that is unintentional but foreseeable: a business owner may find that staying open — even at a loss — is less damaging than closing. Commercial real estate professionals sometimes refer to these as “zombie tenants” — businesses that remain open not because they are healthy, but because the financial consequences of closing may be far worse than continuing to operate at a loss.

There are small businesses that stay open and lose money every month. Not because they want to — but because the lease has made closing the more dangerous decision.
Side-by-side illustration: the landlord stands behind an intact LLC shield marked Protected. The tenant stands with a broken LLC shield — marked Exposed.

What happens to the person who tried?

One side is protected. The other is exposed.

Most commercial leases include a personal guarantee — a clause that reaches past the business and into the owner’s personal life. Both parties sign the same document.

One side leaves having pledged their savings, their home, and much of what they own outside the business. That is a common cost of entry for small business owners.

The consequences are not proportional. If a business fails, the landlord may face vacancy and the cost of finding a replacement tenant. Those are real risks. But the landlord still owns the asset — a property that can be leased again and generate income. The business owner may lose the business and still owe rent on a building they can no longer use. One side fills the vacancy and moves on. The other may spend years rebuilding from it.

— ✦ —

Commercial lease structures have been refined over decades by legal teams working on behalf of landlords. The result is agreements that are precise, well-tested, and highly effective at protecting the landlord’s interests — giving them clear remedies, penalties, and enforcement options when a tenant falls behind.

That same level of protection is rarely built into the standard agreements presented to small business tenants. For a small business owner in financial distress, there is no buffer, no soft landing, no gray zone. The lease is rigid and unforgiving — and when it breaks, it gives the landlord many options to pursue and leaves the tenant with almost none.

The tools to change this exist. Flexible guarantees. Revenue-sharing arrangements. Workout provisions. Structured exits. They are sometimes used. But they are rarely included in the standard agreements presented to the other side.

What gets left out isn’t just flexibility. It’s the foundation for any collaborative conversation — when consequences are the only language the lease speaks, a struggling tenant has no recognized way to raise their hand and discuss solutions.

Most people want their cities and downtowns filled with independent businesses. They want the kind of local stores that make a place feel like somewhere. The lease structures underneath those businesses too often turn financial distress into a high-stakes, black-and-white proposition — pay or default, stay or close, replace or vacate. The rent gets the blame. The lease does the damage.

Q3

Is anything being done about it?

The conditions described in this piece are not unique to Bellingham.

They are part of the standard structure of commercial leasing across most of the country.

The impact on small business owners has become significant enough that some cities and states have begun responding with legislation, organizing, and new protections.

Here's what exists elsewhere — and what's missing here.

What's changing elsewhere

Other cities are already making changes.

Other cities and states have begun addressing these conditions through legislation. Each of the laws below was passed after sustained community advocacy. None of them happened on their own.

A wooden gavel on a sound block.

California

Commercial Tenant Protection Act — SB 1103

Signed September 30, 2024 — Effective January 1, 2025

Described at signing as the first law of its kind in the nation. Requires advance notice before rent increases and lease termination, limits cost pass-throughs, and includes lease translation requirements for non-English speaking tenants.

Seattle, Washington

Commercial Tenant Protections — Ordinance 126982

Effective January 2024

The first major city ordinance in the country to regulate commercial lease terms for small businesses. Caps security deposits, restricts personal guarantee requirements, and requires landlords to notify tenants of their rights.

New York City

Commercial Lease Assistance Program + Tenant Protections

Ongoing — Multiple actions

New York has combined free legal aid for small businesses with community organizing, commercial tenant harassment protections, and active state legislation to address commercial displacement.

A growing movement

This is bigger than three cities.

The Small Business Anti-Displacement Network is a coalition of more than 175 organizations working to prevent the displacement of independent businesses through commercial tenant protections. Supporting tenants is increasingly viewed as a public good, not just a private contract matter. California’s law was described at signing as first-in-the-nation. It will not be the last.

Closer to home

Downtown Bellingham is already dealing with steady vacancies.

If you live in Bellingham, you’ve seen this. As of October 2025, approximately 10% of downtown’s ground-floor retail space is vacant — rising to nearly 15% in the pedestrian core.3 Downtown retail vacancy has increased every quarter since Q4 2023.4 In response, Mayor Kim Lund commissioned a vacancy study as part of her Downtown Forward initiative.

The city is studying vacancy itself. Commercial lease structure is not a major focus of the current analysis.
Empty storefront in downtown Bellingham with a For Lease sign Vacant downtown Bellingham storefront with For Lease sign Another vacant Bellingham storefront window with For Lease sign

A few of the vacancies within a 5-minute walk of EverLocal. There are more as you keep walking.

Why this matters.

Most people want downtowns filled with independent businesses — places built by neighbors, not formulas or store chains. What they may not realize is what it costs the people who try.

When a business closes, people notice the empty storefront and talk about high rents. That’s the visible part. The lease structure underneath is more complex — so it rarely comes up in that conversation. But it may be doing as much damage.

Not every landlord operates the same way. There are good ones — people who communicate, show flexibility, and treat their tenants as partners.

I was able to sign an agreement with my landlords that will release me from my lease obligations and allow me to exit (if conditions are met) — for that I’m thankful. But not every landlord will release their struggling tenant from the lease. For me, getting there meant grinding to avoid potentially devastating consequences from a position with virtually no leverage — while the other side had nearly all of it.

As I researched my situation, what I didn’t expect was discovering how many tools already exist to make these agreements more balanced from the beginning — provisions that can give tenants a more workable path when a business struggles and that allow those businesses to stabilize instead of closing down. They aren’t secret. They just rarely make it into the leases presented to small business owners. It leaves me wondering — why not.

Rob

Bellingham, Washington

Disclaimer

The views expressed in this article are the author’s own and reflect personal experience and perspective. This article is intended as opinion and commentary, not as a statement of fact about any specific individual or organization. References to lease structures, industry practices, and legal frameworks are based on publicly available information and the author’s direct experience as a commercial tenant.

Nothing in this article constitutes legal, financial, or business advice. Readers should consult qualified professionals for guidance specific to their circumstances.

Statistical references are sourced and footnoted. The author has made reasonable efforts to ensure accuracy at the time of writing. Commercial leasing practices vary by market, property, and agreement.

This article reflects one experience within a broader structural pattern that the author believes warrants public discussion.

1 U.S. Bureau of Labor Statistics, Business Employment Dynamics — survival rates of establishments by industry.

2 U.S. Bureau of Labor Statistics, Business Employment Dynamics — Washington State five-year survival rate. Approximately 41% of Washington businesses survive to year five (59% closure rate) — the lowest rate of any state.

3 City of Bellingham — "Vacancy and Vibrancy: Examining Occupancy Trends and Potential Strategies to Address Vacancies in Downtown Bellingham," Mayor Kim Lund's Downtown Forward initiative. Data collection began September 2025.

4 Pacific Continental Realty, Ryan A. Martin — Quarterly Commercial Real Estate Market Reports, Bellingham, WA. Q4 2024 through Q1 2026.