It's no surprise to hear retail leases stalled during the pandemic. With many stores closed or with limited capacity and the future of the market uncertain, retailers have halted their expansion plans. However, some new leases are still being signed. Major retailers are continuing new leases even during the pandemic. These retailers help drive leasing activities forward.
"In terms of new leases, I would say that given the current climate and the uncertainty surrounding the pandemic, fewer new leases are being signed." Chris Rizza, a partner at Crosbie Gliner Schiffman Southard & Swansontells GlobeSt.com. “Many tenants who want to sign new leases and rent space are standing on the sidelines and waiting. New contracts that are entered into are usually for tenants who provide essential services – tenants for whom consumer demand has not seen a significant decline during the pandemic. "
In fact, Rizza has just been working on such an important lease for a Dollar Tree store that opened due to the pandemic. “I recently negotiated and signed a new lease for a Dollar Tree store – a discount store – in Merced, California on behalf of a rental customer. Stores like this, as well as grocery, home improvement, and drug and convenience stores, have generally done well during the pandemic, ”he says. "With regard to existing leases, the landlords and tenants I've worked with have been relatively cooperative in agreeing concessions and making changes."
In order to simplify leasing activities, retail companies have granted leasing concessions very openly and flexibly, looking for new opportunities and even existing leasing contracts on a case-by-case basis. "In general, the landlords I represent have been reasonable and measured against changing existing leases and granting concessions to certain tenants," says Rizza. "There is no such thing as a 'one-size-fits-all' approach. A landlord's willingness to offer concessions depends on a number of factors including, but not limited to, whether or not the renter really needs assistance, if so The tenant's business has actually declined as a result of the pandemic, the tenant's financial strength and the past. The tenant's performance / behavior. "
For existing tenants, previous relationships and services also play a role. "If the landlord and tenant initially had a rocky relationship before the pandemic, it will of course be more difficult to agree terms for a change in the rent relief," says Rizza. “However, most landlords understand the economic burden tenants are experiencing from this pandemic and are generally willing to work with tenants who are sensible and not too demanding. Again, sensible parties are required to come to the table and put their heads together to strike a structured deal that makes sense for both sides, rather than one side trying to threaten or force its path to a one-sided outcome. "