Insights From a Shopping Center Owner During COVID19

Wow! 

We are living through history as I am telling my sons.

It is crazy out there. I have gone from being stern 2 weeks ago, “everyone is overreacting– and I am not going to allow my tenants to not pay their rent” to becoming a bit concerned, “Hmmmmm they closed the schools, this is not going to be good”, to being scared, “Wow, the government just shut down 90% of my tenants, the letters and calls are pouring in from tenants saying they can’t pay rent for the near future”, to hopeful, as two of my three lenders have agreed, to defer my mortgages for 90 days with next to no bureaucracy”! 

Whew! 

And I wonder why I feel every night after dinner that I need to take a walk and get some fresh air!

I have been getting a ton of questions about my thoughts and I will try to answer as many as I can.

If you haven’t watched the webinar I conducted last week, please check it out at www.azoracademy.com.

Also provided there is a Rental Assessment Application you can download and, yes, use for your own purposes. 

But here goes on some of the other questions posed since the webinar:

1. #1 priority–Talk your local tenants off the ledge. It is very important that the tenants you want to remain in your centers after this crisis are there for you. You need to be there for them now. You can do this easier if you have cooperation with your lender. Once again, having a loan with a local bank proves to be extremely smart, as I am hearing CMBS lenders, as usual, aren’t being cooperative. There is no one to speak to. 
2. I only have a small portfolio, 6 centers -6 mortgages. I know all of my tenants. If you are a larger landlord and are considering laying off anyone on your leasing team, consider asking them to be “ambassadors” to help your property management teams. Leasing agents can help have conversations with tenants. Help collect valuable info so that leadership can make important decisions. Help review leases to look for too wide of exclusives, too vague use clauses, etc. Review past and current sales.
3. Call you lenders now! At first, I was afraid to call them, I am so glad I got over the fear –“Don’t Say No For the Prospect”– 2 of my 3 lenders immediately made me feel at ease as they were ready for my request and granted it. 
4. Many of you are calling about the fear of losing your jobs–my advice, especially if you are a leasing agent-communicate that you are ready, willing and able to do anything at the company-now is the team to be a team player. Show your value, maybe offer if you can, to willingly reduce your salary. If you’ve been smart and have some savings, your offer would speak volumes! And I am sure would get rewarded later. Your bosses are hurting, scared, and the last thing they want to do is lay anyone off, help them out -if you can. If you already did get laid off, brush up your resume, reach out to recruiters and start blogging and posting content on social media. Join my webinar next week on “Creating a Brand on Social Media”. This will help you stand out amongst the other candidates.
5. Prospecting–Kara and I have been reaching out to supermarkets, medical supplies, liquor stores, convenience stores, farmers' markets, hospitals, existing tenants who remain open, meat stores, etc, and we are getting positive responses. 

We are NOT prospecting to other uses. I have been reaching out to my retail “friends” to check in on them. They are not my tenants, but retailers that maybe I had spoken to in the past, or tried to do deals with or that I have relationships with as a consumer. They’ve been very appreciative. I’ve been reaching out to 3-5 of these per day.

1. Rebound– After this is over, I firmly believe we will have a rebound like no other! People being shut in their homes will explode with shopping and entertainment–I think! Hopefully, they will have money to do so! The government needs to help us prep for this. 
2. Operations– Unfortunately, because of no rents coming in, I have cut all unnecessary services-like pest control, rust control, advertising, etc. I have reduced porter and garbage and I monitor this every few days and check in with my tenants who are still open to make sure we are providing the necessary services. 
3. Rental deferrals– If you give a rental deferral, I recommend:

Getting a lot of info from the tenant to review first: sales for 2019 and sales year to date. They should sign a confidentiality agreement. They should sign an amendment or promissory note. You should better your terms if you can or need to -ie tighter exclusive. Taking their security deposits won't help us, they are not in a separate account. (Watch my webinar)

1. Provide assistance programs to your tenants as you hear about them.
2. All franchisees need to ask their franchisors for help first. 
3. Nationals are for a whole separate article. 

Be safe my friends, I hope we will be on the other side of this craziness soon!

I hope this helped?

Mark your calendars!

Rent Assesment Request Webinar - Round Two is on Tuesday, April 7th at 12:00pm EST! More information coming soon.

Click HERE to add to your calendar!