{"id":1004483599,"date":"2020-10-09T10:47:52","date_gmt":"2020-10-09T18:47:52","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004483599"},"modified":"2020-10-09T10:47:52","modified_gmt":"2020-10-09T18:47:52","slug":"a-reimagined-retail-tenant-landlord-relationship-can-bridge-the-covid-19-gap","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/a-reimagined-retail-tenant-landlord-relationship-can-bridge-the-covid-19-gap\/","title":{"rendered":"A Reimagined Retail Tenant-Landlord Relationship Can Bridge the COVID-19 Gap"},"content":{"rendered":"
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Cynthia Nelson<\/p><\/div>\n

The uncertain environment retailers and landlords are now occupying in the COVID-19 era requires a collaborative spirit in order to emerge healthier in the coming months ahead. A reimagined relationship can help both parties emerge intact from a slow recovery period.<\/p>\n

Reevaluating tenants and rents<\/h2>\n

Shopping malls and certain classes of tenants are still being strongly impacted by the shutdown, on top of extant issues in the struggling retail industry, such as the rise of e-commerce and expanded competition that disrupt consumer buying habits and loyalty. With severely reduced foot traffic and indoor entertainment venues like movie theaters and arcades, as well as indoor dining, closed or operating at a substantially reduced occupancy, retailers\u2019 recovery will be a continuing challenge for landlords.<\/p>\n

Rent collections are improving\u2014up from 25 percent at the beginning of the pandemic to around 60 percent today\u2014but the tepid back-to-school season and curtailed family entertainment are hurting many malls. Given the amount of redevelopment and repositioning toward entertainment that had been taking place in malls, retail tenants are now struggling even more as a result of the pandemic, and with them, their landlords.<\/p>\n

Of course, when tenants cannot pay rent, landlords cannot meet their debt service and pay operating expenses. This may require landlords to take a hard look at their tenants to evaluate those that will bounce back and attract consumers to create a more vibrant post-COVID-19 property versus those that will likely continue to struggle to survive. In other words, landlords need to look at which tenants to support with flexible rent considerations and those that will not be included in future plans.<\/p>\n

A tripartite financial relationship<\/h2>\n

It is likely that although certain lenders have been somewhat accommodating about near-term debt service by providing deferments of payments, extended maturities or otherwise restructuring loans, landlords will ask for further relief through the end of the calendar year\u2014and debt service will be a major concern in 2021. Rent considerations are affecting all parties involved, today and in the near future:<\/p>\n