X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

WASHINGTON, DC-Green Light Retail is forming an advisory to assist landlords and tenants with an increasingly common scenario: the renegotiation of retail leases. Industry veteran Roger Gerst–who served as director of Leasing for Carl M. Freeman Assoc. and was senior associate and project equity partner with Trammell Crow Co.–is being tapped to be managing director of the new venture.

The point of advisory is to have a third party handle the negotiations to keep the relationship for deteriorating even further–as well as take on the donkey work required on both sides to determine whether a retailer truly is in need of a renegotiated lease, Green Light principal Peter Framson tells GlobeSt.com. Examining financial statements, sales figures, marketing plans and other related documents, are all part of the analysis.

The unexpected severity of the recession has caused many retailers to fall on hard times, Framson adds. “A lot of these companies really do need some assistance with the rent.” At the same time, more retailers are pushing the envelop asking–or demanding in some cases–rent negotiations or reductions when their sales do not warrant such accommodations, he says. Indeed, several national retailers have sent letters to developers dictating new terms to their landlords, worded in varying degrees of politeness, Gerst tells GlobeSt.com.

Renegotiating such leases can be very complex, depending on how they are written, Framson says. “There could be a personal guarantee involved or there may be a situation where a landlord wants more flexibility in the center and wants to relocate the tenant to another space. Or there may be a situation where a landlord promised a certain amount of occupancy and if a space goes dark it could default on other leases.” Favored nations clauses are another factor, he continues, “with these, a tenant can ask for lower rent or maintenance if a neighboring tenant receives a similar discount.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.