Blog

Tag: <span>retail</span>
No Comments

Wary Of Another Shutdown, Retail Landlords Sweeten Pot For Tenants

Author: Admin
Categories: Commercial News,Retail,Shopping Centers

Some retail landlords are offering additional concessions to tenants in case the government mandates another Covid-related shutdown.

Landlords are including language in new leases that allows retail tenants to defer part of their rent if the government requires store closures, according to the Wall Street Journal. Many insurance policies did not cover pandemic-related losses, leading landlords to find new ways to keep struggling tenants in place.

In one case, EastBanc, which owns and operates 25 retail properties in Washington, D.C.’s Georgetown neighborhood, has offered to cut tenants’ base rent to 50 percent if the city forces a shutdown, the Journal reported.

In Detroit, development company Bedrock — created by billionaire Dan Gilbert — is allowing tenants to forgo their base rents if they provide the company with 7 percent of gross sales.

Throughout the pandemic, retail landlords have largely offered deferrals to tenants whose businesses have been decimated who were unable to pay rent. But other landlords have sued and sought to evict some chain retailers over millions of dollars in unpaid rent. Meanwhile, landlords are seeking to exclude pandemics as being labeled force majeure events — act of God — which they argue would make it more difficult to get financing if that language is included.

 

Source:  The Real Deal

No Comments

From Bankruptcies To Rent Relief, Here’s How Retail Landlords Can Prep For The Coming Fallout From Covid-19

Author: Admin
Categories: Commercial News,Leasing,Retail,Trends

For the last 18 months, Noah Shaffer has been counseling retail landlords who lease space to Pier 1 Imports to be ready for the company to declare bankruptcy.

Pier 1, known for its eclectic mix of home goods and furniture, filed for Chapter 11 bankruptcy protection in March. This week, the Fort Worth, Texas-based retailer said that it was unable to find a buyer for its business and that it will close all stores nationwide. Shaffer’s clients, however, were ready and already in talks with new tenants to take the space.

Navigating tenant bankruptcies will be far more challenging in the era of Covid-19. The novel coronavirus pandemic has forever changed the restaurant and retail business, beginning with stay-at-home orders across the U.S. in March and April to a severe drop-off in consumer spending. A wave of bankruptcies is expected in both the retail and restaurant industries in the coming months, affecting everyone from national chains to mom-and-pop shops.

 

Source:  SFBJ

No Comments

How Will Food Halls Fare Post COVID-19?

Author: Admin
Categories: Commercial News,Retail

Food halls will struggle as states reopen businesses and some may close permanently, say industry sources. Over the long term, however, they should return to their pre-COVID-19 success.

Before the virus hit, there were approximately 226 food halls operating in the U.S., according to Phil Colicchio, executive managing director of Colicchio Consulting, the specialty food and beverage, hospitality and entertainment group at Cushman & Wakefield

“Prior to the current health crisis, food halls were a growing trend that catered to a macro trend among consumers looking for more authentic and varied dining options, as well as more experiential and community elements,” says Scott Holmes, senior vice president and national director of the retail division with brokerage firm Marcus & Millichap. “While there will be time needed, and perhaps some operating changes that will need to be implemented, we expect that macro trend to continue, making these retail centers attractive to consumers and investors alike.”

But initially, food halls will struggle as they reopen due to several factors and considerations for the operator, says Anjee Solanki, national director of retail services with real estate services firm Colliers International. Those considerations include the need for reduced customer entry, strategic seating arrangements and safety measures such as contactless ordering, kiosk ordering and rotating staff. There will also have to be a significant increase in cleaning, according to Adam Williamowsky, director of restaurants at Streetsense, a design and strategy firm specializing in retail and restaurants. This will in turn create higher labor and materials costs to keep food hall spaces safe and prolong the amount of time it will take for food halls to rebound.

“I wouldn’t say [food halls] are dead, they’re just put on the shelf,” says Solanki. “Of course, food halls are going to take a little longer to open compared to drive-throughs or restaurants that have the ability to quickly flip and provide curbside delivery.”

Some brokers in secondary markets are saying restauranteurs and quick-service restaurants are struggling to get their employees back to work because their unemployment benefits are higher than their original wages, says Solanki. Furthermore, the cost of operating will continue to go up in the entire supply chain for the food and beverage industry.

“The current sentiment is generally negative related to these categories, since many have been forced to shut down, through no fault of their own,” says Holmes. “Once the shutdowns are lifted, and consumers begin to feel more at ease, we would expect all of these categories to come back strongly, but it will take time for that to happen.”

In order to proceed with reopening, food hall owners will need to rethink the operations of their establishments, so they comply with social distancing and other state- and city-mandated health and safety guidelines. For national companies with multiple locations this is an added challenge as reopening plans will need to be customized locally, says Solanki. Williamowsky notes that some food halls will be forced to close permanently.

However, food halls will also have some advantages over traditional restaurant venues in regaining their footing once the lockdowns end.

“The trend that I think is most important is the trend of the economic structure that most food halls are built on,” says Cushman & Wakefield’s Colicchio. “The cost of opening up in a food hall for a vendor is staggeringly low when you compare it to either a food truck or a stand-alone restaurant. And that is going to also be a very important component of the bounce back that we all hope to see.”

In addition to many independent restaurants being severely undercapitalized pre-COVID-19, a big issue for the traditional restaurant model was high fixed rent, says Trip Schneck, executive director at Cushman & Wakefield. But in the food hall model, under a percentage rent deal structure, the landlord and the tenants share the risks and rewards of the enterprise.

 

Source:  NREI

No Comments

Touchless Fixtures, Food Cameras: How Retail May Change Post Pandemic

Author: Admin
Categories: Commercial News,Retail,Trends

The glass partitions may stay up in stores at cash registers long after the pandemic leaves, as retailers aim to offer a variety of measures to make customers feel safe again, experts say.

Other such changes range from subtle — such as touchless doors and sink handles — to not-so-subtle, such as bringing some retail items behind a counter instead of open for everyone to touch. The ideas being bandied about show just how quickly the novel coronavirus has changed retail businesses, much of which had to shutter or reduce service due to stay-at-home orders.

These shutdowns have impacted revenue drastically, with some retailers on the brink of permanently closing their doors.Nationwide, about 630,000 stores have closed due to COVID-19, and $430 billion in revenue may disappear in the next three months, according to the Financial Times.

Businesses will have to adapt in order to survive and bring customers back, experts say. But these changes can’t move too quickly or be implemented in a way that would make it more cumbersome for customers. Still, many companies are going back to the drawing board right now with these new ideas, said Erin Simpson, business development and marketing for Orlando-based architecture firm Scott + Cormia Architecture + Interiors.

“Our culture already has bought into it — design just needs to catch up,” added Jose Lugo, vice president at Miami-based architecture firm Bermello Ajamil & Partners Inc.

Restaurants may see some noticeable changes. Tables and bar stools could be spaced out more. And cameras may beam back live video of the kitchen to monitors in a seating area for customers to see how their food is being prepared, said Cindy Schooler, senior vice president and market leader for Dallas-based SRS Real Estate Partners.

On the soft goods side, e-commerce will continue to disrupt retail delivery. But it remains to be seen if these retailers will want things returned, like clothes, if they feel they’ve been contaminated.

“The things I hear on calls now, I say, ‘Wow I never thought of that,'” Schooler said.

That said, no one knows how much brick-and-mortar retail will change. And — while some common sense measures may stick around — people may want to be closer to strangers again once they feel safe, said Drew Forness, president of Winter Park, Fla.-based Forness Properties.

“We’re all going to get back to some sort of normalcy,” he said.

 

Source:  OBJ

No Comments

Retail Landlords Are Creating A Blacklist Of Tenants That Aren’t Paying Rent

Author: Admin
Categories: Commercial News,Leasing,Retail

While mom-and-pop retailers may be feeling the economic pain of coronavirus the hardest, some bigger companies have decided to forgo rent payments as well. But landlords aren’t buying it.

Owners of malls and shopping centers have been putting together a “blacklist” of financially stable tenants that haven’t met their April rent obligations, the Wall Street Journal reported.

“We think that it’s their duty to pay April rent,” chief executive officer of Kimco Realty CEO Conor Flynn told the Journal. “The customer base is going to recognize who the bad actors are.”

According to Marcus & Millichap, April rent collection has ranged from just 10 to 25 percent for mall owners with higher concentrations of nonessential tenants, to 50 to 60 percent for landlords with “essential” tenants such as grocery stores and pharmacies.

Large retail tenants that have failed to pay rent in full include Burlington Stores, Petco Animal Supplies, LVMH Moët Hennessy Louis Vuitton, Victoria’s Secret and Staples.

Staples, which has been able to keep many stores open in areas where it is considered essential, has told landlords that it will not pay rent because of a drop in sales. Dick’s will not pay rent at stores that were closed due to government orders, but will continue to pay rent for stores that it closed voluntarily.

While some mall owners have indicated that they plan to declare non-paying tenants in default, smaller landlords may be more hesitant to confront big tenants over rent payments. Retailers appear to recognize that they have the upper hand, but things could get messy.

“The retailers think they have leverage here and they’re trying to use it,” Green Street Advisors analyst Vince Tibone said. “I see it potentially becoming a fight and going into litigation.”

 

Source:  The Real Deal

No Comments

For Retail Sector, Liquidity And Communication Key To Surviving Coronavirus Crisis

Author: Admin
Categories: Allapattah,Aventura,Commercial News,Miami Beach,Retail,Trends,Wynwood

Measures to contain the spread of coronavirus are still shifting by the day — and so are responses by investors, developers, builders, banks and buyers. To track the impact in real-time, RE|source Miami is asking area real estate professionals in various sectors for on-the-ground reports.

Today we hear from Michael Comras, president & CEO of the Miami-based Comras Company, which specializes in the development, leasing and sale of urban and suburban retail properties across South Florida.

As a principal in various development entities, Michael has also been involved in shaping retail in high-profile destinations including Coconut Grove, Miami Beach’s Lincoln Road, Design District, Wynwood, and Downtown Miami.

Q: How is the South Florida retail sector coping with the unfolding coronavirus crisis, and the economic slowdown we are experiencing?

In the short term, the market has been significantly impacted due to the government mandates requiring that all restaurants and non-essential retailers close their doors to curb the spread of COVID-19.

As a community, we need to acknowledge the challenging times ahead and recognize that by working collectively we will get through the pain and ensure that the retail and restaurant community lands on its feet. Now more than ever, tenants and landlords need to work in unison toward a common goal: sustaining business and our retail and restaurant economy.

Everything that existed prior to the coronavirus pandemic will exist again, but there is no silver bullet to solve the economic slowdown. The building blocks to recovery will depend on solid relationships and positive collaboration amongst all stakeholders.

Landlords do not want widespread vacancies and tenants want venues where they can grow their business and thrive. Fusing these objectives into a cohesive goal will allow the retail sector to reemerge stronger, faster. In addition, banks and lenders need to work closely with developers and property owners to make sure liquidity continues to flow. State and Federal financial relief will also provide necessary support.

 

What is the state of construction in Miami-Dade? Are real estate projects still getting built, and have timelines been delayed due to the virus?

The good news is that most construction projects in Miami are making headway and moving forward as planned, to the extent that the work can be completed in a safe manner. Construction firms are following strict guidelines to ensure social distancing inside job sites.

We expect to see delays in lease negotiations and leases that have not been executed. The permitting and approval process required for tenant interior buildouts will also take longer, and projects currently undergoing inspections may lag as there are new restrictions that will limit on-site inspections. In addition, the plan approval process will be extended by cities prohibiting the “walk-through” of plans. A process that provides for a quicker review of buildout plans.

 

Many retail tenants have shut their businesses. How are you counseling regarding landlords and rent concessions?

Communication is key. There is no one-size-fits-all strategy to resolve these issues. Every landlord has a unique relationship with their tenants and the parties must openly communicate to arrive at a sustainable solution that can work for both sides.

Local retailers and restaurateurs are integral to the fabric of our community and, unfortunately, they are the ones being most affected. In the spirit of working through a difficult time, all sides must be honest and transparent. Often, landlords are not privy to tenant sales figures, which is the main indicator of how a business has been performing. It will be important for tenants and landlords to look at the sales trends prior to the crisis to strategize towards a successful resolution.

Access to information can help guide landlords when evaluating potential rent concessions for their tenants. Solutions may include rent abatement, deferrals or other payment structures that allow both the tenant and landlord to navigate this hardship and remain open for business.

 

Do you anticipate that this outbreak will have a long-term, lasting impact on the way real estate projects are planned and designed?

Prior to COVID-19, retail was already going through a major transition, becoming more experiential and interactive. This will only become further pronounced as we emerge from this pandemic. At the same time, people are becoming even more accustomed to ordering goods online – since they have no other option at this time – and this could have a ripple effect on select brick-and-mortar businesses. Retailers will need to continue to improve their business’s online capabilities.

Miami is a unique “city of villages”, a series of walkable destinations such as The Miami Design District, Wynwood, Miami Beach, Brickell, Coconut Grove, Downtown Miami and South Miami. Connectivity, walkability, and revitalization will continue to fuel our local real estate economy. As human beings, we are social creatures who thrive on congregating and being a part of something greater than ourselves. Experiential retail will perfectly align with the pent-up demand people will have to enjoy experiences from dining and shopping to family entertainment once these stay-at-home measures are lifted.

There is no city as resilient as Miami. We’ve endured natural disasters with devastating hurricanes, deadly diseases with Zika and H1N1, and now the novel coronavirus – but with each setback we’ve come back stronger and have continued to thrive. This is a serious crisis that we will overcome. By supporting one another and working together, we will once again come out on top.

Source:  Miami Herald

No Comments

A Strategy For Successful Retail In A Changing Market

Author: Admin
Categories: Commercial News,Development,Retail,Trends

Millennials brought on a cultural shift built around valuing experiences over material things. This trend resulted in another movement—away from suburban sprawl and toward live-work-play and mixed-use environments.

Commercial Property Executive asked Scott Sherman and Ben Mandell, co-founders of Miami-based real estate investment firm Tricera Capital, how they choose the right neighborhoods for bringing more experiences and character to a city. Approximately one year ago, the firm acquired the Palm Beach Post building, a former printing press and newspaper headquarters located in West Palm Beach, Fla., with the intention to transform it into a mixed-use building encompassing retail and office space. The project is scheduled for completion in the first quarter of 2021.

The duo also talked about the way adaptive reuse and redevelopment projects can enhance and preserve the essence of a community by creating relevant retail experiences while honoring the history of a building.

The retail segment has been constantly changing for the past few years. How would you describe the sector today?

Sherman: It depends on the type of retail. Retail is definitely evolving, but not all retail is dying as you read in the media. Our focus on emerging and mature growth markets with a dense urban core has been proving out. Service and entertainment-focused retail is doing well, and larger national brands that have been quick to adapt, downsize and change merchandising and product offerings have also been performing well.

What kind of retail assets and tenants are you targeting in this late-cycle environment?

Mandell: We are focused on neighborhoods and cities in the Southeast U.S. with a strong population and job growth. Over the past decade, the national trend has shifted from suburban sprawl to live-work-play and mixed-use environments. With e-commerce thriving, we are focusing on retail uses that can’t be replaced online. Food and beverage and entertainment-type uses are thriving right now, but you need to balance that with a mix of other uses such as fitness, service and some dry goods as well.

Retail today is mostly about experiences. How do you make sure that your properties remain relevant for tenants and customers alike?

Sherman: I like to say we are in the business of betting on operators and concepts. We come across a lot of new operators and concepts and need to determine which ones we believe will be successful within our project, and which operators have the experience and ability to execute. When we find great operators in a market, we like to try and work with them to create new concepts that we believe will be synergetic with our tenants.

This is extremely important today, as the idea of “credit tenants” is not what it used to be. Most of these new experiential tenants are not AAA-credit, nor do they have significant balance sheets to put behind the lease.

What strategy do you use when choosing a new location for a retail investment?

Sherman: We take a more of a rifle than a shotgun approach when exploring a new market. We will first look for cities with an influx of residential and office density/job growth. If the job market is strong and the residential market is growing, we look to find the street, neighborhood or pocket that has the bones and character to be a vibrant and pedestrian-friendly retail area that we can start to assemble and merchandise.

We also understand that every city/market is unique, so we like to understand the demographics and type of residents living and moving there to better cater the retail mix to the residents. We also try to embrace the local tenants and operators and sprinkle in regional and national tenants where needed. Central Avenue in St. Petersburg, Fla., is a great example of a street and city that checked all the right boxes, and we have been successful in executing our strategy there.

 

Source:  CPE

No Comments

CRE Momentum To Continue Into 2020

Author: Admin
Categories: Commercial News,Offices,Retail,Trends

The market for commercial real estate from occupiers and investors has continued to be relatively flat overall in the third quarter.

The latest Commercial Property Monitor from international real estate body RICS reveals generally solid conditions for the office and industrial sectors but retail continues to have a tough time as the shift to online shopping remains. Interest from occupiers and investors in retail declined in Q3 2019.

For the coming year though, retail should see a modest uptick, while office and industrial sectors look likely to see strong gains, especially in prime markets.

“While there is an industry-wide effort to invest in and transform real estate for a more connected and sustainable future, these innovations in how people live, work and play aren’t yet the standard, especially outside prime markets,” said Neil Shah, Managing Director for RICS in the Americas. “What this means for the overall retail sector is continued underperformance, particularly in secondary markets, in comparison to the office and industrial spaces.”

Capital Projections

Capital value projections over 12 months are positive for all sectors apart from retail, although for industrial the projections have cooled despite ongoing sentiment.

“Real estate leaders are increasingly believing that, after a protracted period of growth, the market is now approaching the top of the cycle,” said Tarrant Parsons, Economist with RICS. “While indicators are still generally solid for other sectors, the troubles in the retail sector show no signs of abating. The downward demand trends, particularly in secondary locations, is likely to result in a significant decline in capital values over the year to come.”

Survey respondents were asked to compare conditions over the latest three months with the previous three months, as well as their views on the overall market outlook.

 

Source: Mortgage Professional America

What Can We Help You Find?

About FIP Commercial

Discover prime performance for your asset or portfolio with FIP’s Repositioning professionals. We offer experienced asset management professionals and techniques to help you scale the positioning of your property and the growth of returns. Our Valuation professionals will assist you with everything from financial analysis to personalized investment strategies to meet your needs.

Social

Contact Us

2136 NW 1st Ave Miami, Florida 33127 (305) 438.7740 web@fiprealty.com
© 2024 FIP Commercial. All rights reserved. | Site Designed by CRE-sources, Inc.