MIAMI—Jason Baker, principal at Baker Katz, has worked with the likes of Sprint, Best Buy OfficeMax, Party City, Gold's Gym, and many others over his retail leasing practice. Through these experience, he's gleaned insights into how to get the deal done.

GlobeSt.com caught up with Baker to get his take on how he approaches retail real estate leasing transactions, the biggest challenges he faces, how he overcomes them, and more in part two of this exclusive two-part interview. You can still go back and read part one, “Retail Guru Shares Three Words: Pent Up Demand.”

GlobeSt.com: How do you approach retail real estate leasing transactions? And is it any different than how other firms approach it?

Baker: We are always mining for ways to create value for our clients. The type of value and approach varies based on each client's needs, but is always geared toward getting them the best space for the best possible price.  

GlobeSt.com: What are biggest challenges that you've come across handling retail real estate leasing transactions? Can you give me specific examples from deals?

Baker: Delivering on our client's demands for irreplaceable space has been the biggest challenge this year and I don't see that stopping anytime soon. Demand far outpaces supply right now, which has driven up the competition for space and therefore rent.

GlobeSt.com: How do you overcome those obstacles?

Baker: We maintain direct contact with both retailers and developers on a daily basis.

GlobeSt.com: What trends have you noticed in handling retail real estate leasing transactions?

Baker: Tenants and retailers are more open than ever before to accepting a sublease/assignment and paying “key money” to displace tenants.

GlobeSt.com: How do you expect the retail real estate market to change in 2014 and how will that impact how leasing transactions happen?

Baker: I expect to see some fall-out in the grocery segment as a natural side effect to the increased competition in the market. This will likely result in some closings, but I also believe that some of the big players may start coming together. Whether they align and merge or just begin absorbing vacant space, I can't be sure, but it is likely that we will begin to see this type of movement in the grocery segment.

In Houston specifically, two new power centers will begin construction in northwest Houston and Pearland, respectively. With this new development, we can expect more grocery store announcements, as well as some added retail space.