Glendora Shopping CenterTransaction volumes have frozen across asset classes during the pandemic, and it isn’t hard to see why. Simple steps like viewing a property, completing due diligence, pricing and securing debt have all become significant hurdles. El Warner of Colliers International, however, has not only managed these challenges but has opened and closed new retail deals during the pandemic

How? For Warner, the answer is all but obvious: you split the risk between the buyer and the seller. While it doesn’t feel like it, at some point, the pandemic will come to an end and the market will rebound. Warner’s goal is to protect the operating income in the interim through a seller guarantee. In other words, if the buyer expects the market will rebound in 12 months, the seller will guarantee the property income for 12 months. “If a tenant does not pay rent, the seller will be responsible for the rent and the buyer will send the tenant an invoice,” says Warner, an EVP at Colliers International and a member of the firm’s capital markets board of advisors, tells GlobeSt.com.

This deal not only protects the operating income for the seller, but it also props up the price and cap rate during a time of extreme uncertainty—and above all, it eases concerns. It’s a true win-win deal. “That navigates the risk between the buyer and the seller, and calming both sides down to the reality that there may be some lost rent but the price won’t drop significantly,” says Warner.

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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