Commercial landlord-tenant cases differ from residential landlord-tenant cases in every dimension that matters, and the mediations that treat them as scaled-up residential disputes leave money on the table or end in an impasse for reasons unrelated to the merits.
I have spent thirty-seven years litigating commercial lease cases in Florida, on both sides of the table, and now I mediate them. Confidentiality keeps me from telling you about specific matters, which is just as well, because the patterns matter more than the particulars. What follows is what I see in the room, what I think the parties are missing, and what I do about it.
The accrued rent is not the case
Landlords come in with a number. It is usually the accrued rent, sometimes with an acceleration multiplier attached, and the demand letter treats it as the floor. Tenants come in with their own number, usually the accrued rent minus the offsets they think they can prove, treated as the ceiling. Both numbers are wrong, and both sides know it on some level, but neither has done the work to determine the real numbers.
The landlord's actual position depends on questions the demand letter never asks. How long will the space sit vacant if the tenant leaves? What does it cost to demo the existing build-out for a replacement tenant who needs a different layout? Is the mortgage holder going to consent to a workout, and if not, what does that constrain? What happens to the rent roll on the rest of the property when other tenants see the vacancy? None of that shows up in the accrued rent calculation, but all of it shapes what the landlord should be willing to accept.
The tenant's true position turns on a different set of questions: What will the business look like six months from now if it pays the demanded amount—and if it pays the tenant's number instead? Can the principals satisfy the guaranty if the entity fails, and what assets are realistically reachable if they cannot? What will it actually cost to relocate an operating business, and how many customers will it lose in the process? The opening offer is rarely tied to that analysis, because the analysis usually has not been done.
My job in caucus is to walk each side through the questions they have not asked. I am not allowed to give an opinion, and I do not. But I can ask. The questions usually produce a longer pause than the parties expect, which tells me everything about what they actually knew when they walked in.
Both sides usually want the tenant to stay
Residential evictions end the tenancy. That is the whole point of the proceeding. Commercial cases are different. In a meaningful share of the disputes I see, the best outcome for both parties is for the tenant to remain in possession on modified terms. The landlord avoids a vacancy and re-tenanting costs. The tenant keeps the location, the build-out, and the customer base. Both sides save the cost of litigating the eviction to a conclusion.
This sounds obvious. It rarely happens without help. The threat of dispossession is the landlord's leverage, and any deal that preserves the tenancy must replace it with something else. Otherwise, the landlord is giving up its only stick, and the tenant has every incentive to default again the moment the pressure comes off.
The deals that work in this geometry usually involve some combination of conditional rent relief, expanded security, additional guarantees, surrender options triggered by future defaults, or term extensions in exchange for current concessions. The architecture matters. A flat rent reduction with no triggers is a gift to the tenant. A surrender option tied to defined performance metrics is a deal that the landlord can actually live with. The parties rarely arrive with these structures in mind. They arrive with dollars on both sides, and somebody has to put the architecture in front of them.
The guaranty is negotiable
Personal guarantees are treated as fixed by both sides, and they should not be. The landlord assumes the guaranty is worth its face. It usually is not. Florida law shelters homestead, qualified retirement accounts, and tenancy-by-the-entirety property from creditors. A sophisticated tenant principal often has most of his net worth in one or more of those three categories. A guaranty against that principal is worth a fraction of its face in actual collection, and any tenant counsel who knows the asset profile will say so in mediation. Landlords who do not know this come in over-leveraged on the guaranty and then have to back down when the asset picture comes out.
The tenant principal, on the other side, treats the guaranty with more anxiety than it deserves and undervalues what it can buy in mediation. Landlords will trade guaranty modifications for what they actually want, such as accelerated payments, longer-term commitments, additional collateral, or operational changes. A guaranty conditionally released after twenty-four months of clean performance can be more valuable to the principal than a dollar reduction, and it costs the landlord nothing if the tenant performs, which is the outcome the landlord wanted in the first place.
I make sure both sides have thought about this before the dollar negotiation hardens. The guarantee conversation belongs in the first caucus, not the last.
Build-outs are the hidden variable
Tenants who have invested significant capital in a space treat the investment as sunk, while the landlord treats it as irrelevant to the negotiation. Both views are wrong. The improvements have value, and that value differs depending on whether the tenant stays or goes. To a successor tenant, most of the existing build-out is worth less than it cost, because the successor wants a different configuration. To the existing tenant, the build-out is worth more than the residual depreciated cost, because relocating means rebuilding. For a landlord facing a forced surrender, the build-out is often a liability because demolition costs exceed the salvage value.
That asymmetry is value sitting on the table. A continued tenancy captures it. A litigated surrender destroys it. Counsel who walk into mediation without modeling the build-out math have left a real number unexamined. I raise it directly in caucus when the dollar negotiation stalls, because it often unlocks the structure that the dollar negotiation alone could not produce.
Section 83.232 changes everything
Florida commercial possession cases are governed by Section 83.232, which requires the commercial tenant to deposit accrued and continue rent into the court registry as a condition of defending the possession claim. Miss the deposit and the tenant loses possession by default, regardless of the merits of any defense. The statute changes the leverage in the room more than anything else in the procedural picture, and it gets ignored more often than I would have expected before I started mediating these cases.
There are three types of mediation, depending on where the case stands relative to the deposit. The mediation before suit operates in one world, where the tenant still controls the cash. The mediation after suit but before deposit operates in another world, where the tenant is facing a forced choice between writing a check that may exceed its operating capacity and conceding possession. The mediation after the deposit takes place in a third world, where a substantial sum is sitting in the registry, and the question is how the parties want it disbursed. Counsel who do not place their client in the right regime are negotiating against the wrong leverage map.
The recent abolition of the Florida commercial rent sales tax under House Bill 7031 adds another wrinkle. Historical claims include the tax. Prospective lease economics do not. Settlements that fail to distinguish between the two periods create disputes about what was actually agreed.
The settlement agreement is part of the deal
The deal is not done when the parties shake on a number. The release scope, the survival of indemnification, the disposition of contingent claims, the treatment of guarantor liability under the modified lease, and the handling of any third-party claims are not afterthoughts. They sometimes contain more value than the dollar settlement.
I see deals that settle the accrued rent and leave the environmental indemnification open. Deals that release the tenant entity and leave the guarantor obligation ambiguous. Deals that resolve the dispute as pleaded, while ignoring the contingent claim everyone knew was lurking. Each of those is a case that comes back. Sometimes back to me, sometimes to another mediator, sometimes to trial. The point of mediation is to actually resolve the matter, not to defer it on different terms.
I raise the scope questions in caucus before the parties start drafting. Once the number is agreed and counsel are typing, the scope conversation has lost its leverage. It belongs upstream.
Counsel are not always equally prepared
This is the observation I least like making, but it matters, and so I will make it. The commercial real estate bar runs from highly sophisticated counsel who understand lease economics in detail to counsel who handle one or two commercial lease disputes a year as an adjunct to a general civil practice. Both kinds appear in mediation. The mediation, conducted as if both sides were equally prepared, systematically advantages the better-prepared side, which is sometimes the right answer on the merits and sometimes not.
I do not advocate for the less prepared side. That is not my role. What I do is ask the same questions of both sides in caucus, so that the analytical considerations are brought to light for the party that did not raise them. The result is a deal that holds up when the next counsel reads the settlement agreement a year later. The deals that depend on one side missing something usually unwind, in form or substance, within months.
What I tell counsel
Commercial lease mediation is structured work, not just settlement work. The dispute has more variables than the dollar amount of the negotiation reveals. The parties usually arrive without having accurately mapped their own positions. The procedural framework in Florida shapes leverage in ways that are often missed. The mediator's job is to surface what the parties have not examined and to make sure the deal actually resolves the matter rather than deferring it.
Counsel who select mediators for these cases should pick neutrals who have litigated commercial leases on both sides, know the procedural framework, and treat the work as substantive. That combination produces deals that last, which is the only mediator metric that ultimately counts.