Bortnick established Argent, which operates from its headquarters here and from an office in Los Angeles that is headed by managing director Daniel Firtel, because of his belief that changing market conditions presented an opportunity for a firm that could serve landlords and retailers alike. He explains that property owners today need to seek out tenants for their centers, unlike the boom times before the downturn, when tenants often lined up to lease space and owners could simply choose the ones they wanted.
 Firtel |
Bortnick's new clients "saw the need to bring someone like myself who has spent the majority of his time on the ownership side of the business" and who has experience in leasing retail space during good times and bad. Bortnick's career includes posts at Carlsbad, CA-based developer Foursquare Properties, San Diego-based Pan Pacific Retail Properties and Irvine, CA-based REZA Investment Group.
In today's market, Bortnick says, finding tenants--and especially the right tenants for each center--requires a combination of old school methods and new technology."Back in 2005 and 2006, leasing had become almost commoditized. You could put up a sign and send out an email blast and you would have a list of tenants clamoring for the space," Bortnick says.
Leasing agents sometimes became more like order-takers in that environment, he says, but today's market requires a much different approach. He and Firtel employ old school fundamentals such as developing a merchandising plan, canvassing, cold-calling and personally showing spaces to tenants, along with the latest technology to ensure that properties receive as many views as possible, he says.
"You have to have face-to-face meetings with retailers today because they are less likely to make a snap decision," Bortnick explains. "You need to really be patient. A lot of it is an educational process of showing the tenant why the center makes sense and what the advantages are of locating in it."
Bortnick cites a "modest turnaround" in demand for retail space lately and observes that, "Tenants are much more confident than they were even a few months ago." He says that although many tenants are seeking rent reductions or asking for lower rates on renewals, property owners are not offering across-the-board reductions or concessions.
"Most of the owners look at factors like whether the tenant has a good payment history and whether they have been a good tenant in general," the Argent founder says. Some owners are structuring leases as "blend and extend" deals, where they might offer a short-term rent reduction and then add some of those short-term savings on the back end of the lease, Bortnick says, but for most owners the decisions are really done on a case-by-case basis.
Leasing decisions can also depend on when the owner bought the property, Bortnick adds. Those who have owned a property for 15 years and have a low basis in it can afford to offer lower rates, but those who bought in the past few years typically have higher triple-net costs and must make different types of decisions.
The 16 new Argent leasing assignments are properties anchored by a variety of supermarket chains, department stores, drug stores, sporting goods stores and other national and regional tenants. The 16 centers include Larwin Square and Tustin Heights Shopping Center in Tustin, Morningside Plaza in Fullerton; Cypress East Shopping center in Cypress, Palm Court in Fontana, Grove Plaza and Driftwood Plaza in Ontario, Plaza Del Lago in Mission Viejo, Carson Plaza in Carson, Bear Valley Marketplace in Moreno Valley, Placentia Square in Placentia and Palm Springs Marketplace in Palm Springs. The other new assignments also include "a number of other well located properties" occupied by national, regional and local retail tenants.
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