Sports Authority Aeropostale GlobeSt.com: What are some of the major factors causing recent retailer bankruptcies? Donald MacLellan: GlobeSt.com: How do the recent retailer bankruptcies impact retail property owners ? MacLellan: When a retail property owner has a tenant go dark due to a bankruptcy, it not only leaves a significant vacancy, it also has an impact on co-tenancy clauses. Oftentimes retailers in a big box or power center property have clauses in their leases that state if other retailers go dark, their rent can be reduced to a lower minimum rent or a fixed percentage rent. There is also the potential for other retailers at the center to vacate early due to lower sales numbers. Ultimately, it can be very damaging for other retailers as well as the property owner. Quickly finding a new tenant to fill the space is crucial. GlobeSt.com: What can retail owners do to protect their investment? MacLellan: Owners need to be proactive, cognitive of trends in the marketplace, and diligent about who they select as tenants. We advise owners to select retailers that are meeting consumers' daily needs and that are less vulnerable to internet competition. We also provide them with a market review of similar categories of competition in the local area and give guidance on what we think the long-term success will be. It is critical to understand where risk and exposure are in all parts of the ownership cycle. It is also key to be proactive in positioning the center to local demands and the demographic profile. GlobeSt.com: Any other final thoughts? MacLellan: Smart owners, developers and investors are always taking a strategic look at their real estate. In the case of multi-tenant shopping centers, you can't have a passive attitude toward your asset. It is always necessary to be very proactive and several steps ahead of the competition. Visit Faris Lee Investments at RECON booth #C150M www.farislee.com Sports Authority Aeropostale GlobeSt.com: What are some of the major factors causing recent retailer bankruptcies? Donald MacLellan: GlobeSt.com: How do the recent retailer bankruptcies impact retail property owners ? MacLellan: When a retail property owner has a tenant go dark due to a bankruptcy, it not only leaves a significant vacancy, it also has an impact on co-tenancy clauses. Oftentimes retailers in a big box or power center property have clauses in their leases that state if other retailers go dark, their rent can be reduced to a lower minimum rent or a fixed percentage rent. There is also the potential for other retailers at the center to vacate early due to lower sales numbers. Ultimately, it can be very damaging for other retailers as well as the property owner. Quickly finding a new tenant to fill the space is crucial. GlobeSt.com: What can retail owners do to protect their investment? MacLellan: Owners need to be proactive, cognitive of trends in the marketplace, and diligent about who they select as tenants. We advise owners to select retailers that are meeting consumers' daily needs and that are less vulnerable to internet competition. We also provide them with a market review of similar categories of competition in the local area and give guidance on what we think the long-term success will be. It is critical to understand where risk and exposure are in all parts of the ownership cycle. It is also key to be proactive in positioning the center to local demands and the demographic profile. GlobeSt.com: Any other final thoughts? MacLellan: Smart owners, developers and investors are always taking a strategic look at their real estate. In the case of multi-tenant shopping centers, you can't have a passive attitude toward your asset. It is always necessary to be very proactive and several steps ahead of the competition. Visit Faris Lee Investments at RECON booth #C150M www.farislee.com

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Retail Sector Thrives Despite Ongoing Retailer Bankruptcies

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