Just when I want to believe that we are out of the ditch and ready to thrive I come across articles like this and I rethink the immediate future of retail.
Some highlights from the article:
“There are very few retailers that have not reached out to their landlords and asked for a break,” Kelly says, adding that landlords have been barraged since the financial crisis to provide their tenants with rent abatements and reductions.
“During the recession, we did a lot of lease restructuring, and they’re still a big part of the equation.”
Kelly says landlords are driving tougherwhen it comes to settlements on store closures because they know it’s not easy to find replacement tenants in this retail environment. “We’re in a market today where the number of retail tenants, especially those in the 5,000-plus-sq.-ft. category, are less plentiful than they were seven to 10 years ago,” he points out. “The list of retailers that no longer exist goes on and on, and no one has replaced them.”
Kelly expects store closings to pick up in 2015, both in terms of store count and square footage. “There are a number of retailers out there that are in danger of stumbling, and if they do, we could see an unprecedented amount of square footage in play,” he notes.
For all real estate categories whether you are in Retail, Office, Medical Office, Industrial, etc. it is very important to have your lease audited. Only then will you have the information you need to make important decisions on your lease status. Are you paying too much? Do you have too much space? Do your options provide opportunities or threats to your business? What are others in your category doing right now? What are best practices you can learn from and utilize?
A qualified commercial real estate expert can help you determine the answers to these important questions, save you money, and help your business thrive and excel in any market condition.