Retail Stakeholders Continue to Move with Caution

Michael Wiener, the founder and president of Excess Space Retail Services, has been working with retailers since 1992.

Throughout his career, he has never seen a market behave like it is today.

Though Weiner has worked through different economic downturns, COVID presents unique challenges.

“During 2008, I think that it was such a shock to our financial system and everybody recognized that something national in nature was happening here in our country,” says Weiner. “This is different. Different parts of the country have experienced spikes at different times.”

In 2008 and 2009, Weiner says landlords and retailers were moving “pretty quickly” to address the economic crisis.

“Now, there is a lot of mixed messaging out there,” he states. “I think people are still trying to unravel what this [pandemic] all means, what it’s going to look like and how long it is going to last. Everything does revolve around the pandemic and how long businesses have to stay at 25% to 50% capacity. Nobody knows how long this will last. People are taking a lot more time in the process and being more cautious.”

Right now, Weiner says there is a lot of tentativeness in the market.

“Landlords are reacting slowly,” states Weiner. “Retailers at this point are taking longer to process things. I think that everybody is just waiting to see what happens. I think there is a certain amount of hesitation in the environment that is pervasive and unlike anything I’ve ever seen before.”

This isn’t universal. In some cases, business is carrying on as usual. For instance, some retailers are still remodeling stores.

However, in most cases, there are ongoing discussions between landlords and retailers about rent relief.

“We’ve been trying to find a balance between the landlord and the retailers and what allows them to move forward,” Weiner says.

Right now, Weiner suggests that everyone is moving a little slower before making significant decisions.

“I think people don’t know when things are going to be moving forward,” he says. “You’ve seen retailers that are open one day and had to close their doors the next.”

When there are discussions around rent relief, Weiner recommends that the conversations remain as simple as possible.

“If you put too many other things into that discussion, you’re complicating the discussion, and you’re eroding the chances of getting the relief,” Weiner says. “Now, you’re going into some long-protracted negotiation. It has to be short and quick and kind of an in-and-out negotiation.”

If a retailer wants more provisions added to the lease, they can always restart discussions when things settle down.

“You can always go back to the landlord at a later date and time and renegotiate other points that may be important to the retailer,” Weiner states.