Retail Connection Managing Director Cautions: Reduced Rents Come With a Cost
Dallas-based Retail Connection has more mixed-use, retail and restaurant properties around the DFW and Texas than you can shake a stick at, if that's your idea of fun. Which is why GlobeSt.com had its brokerage managing director, Steve Zimmerman, write a piece about the latest trend in real estate: business operators renegotiating their leases with property owners in the hopes of dropping rent just to keep the doors open. Sounds familiar: Victory Park's Dustee Tucker told Unfair Park earlier this month that Hillwood is "working with all of our tenants to make concessions as far as adjustments in their rent."
But Zimmerman cautions those looking for reduced rent, it's a two-way street:
What we try to do is help them understand that it needs to be a win-win. If you want us to help, we want to know that you're really doing everything you can. We like to look at their business plan and their financials. If they're a franchisee, have they gone to the franchisor or the bank for help? What kind of rent reduction are you looking for and how long? You need to get really specific about it. We're willing to do something if they're willing to make it up on the back end or if you're willing to give up some contingency clauses that will allow us to lease to someone else.
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