RECon Panelists Share Recession Tactics and Tips

0521recon.gifRECon has wrapped up, and the ICSC is offering up some of the ideas and information that came out of the conference.

Of particular interest was a panel on handling retailer rent-break requests. Here are some of the highlights:

“In a nutshell, tenants should be ready to clearly demonstrate need, said Mez Birdie, director of retail services for Maitland, Fla.–based NAI Realvest. Request profit-and-loss and earnings statements, and be sure to know the proper rent-to-sales ratio for the tenant’s merchandise or restaurant category, he said. “Tenants need to show us their pain. While the landlord may not always agree [to a cut], you need to have the facts in front of you.” Birdie also stressed that landlords “must still negotiate in good faith, not from an adversarial position.”

Co-tenancy clauses in rental contracts, which often trigger lower rents if occupancy falls below a certain level, are coming back to haunt many owners now, panelists said. Cynthia Frank, director of real estate asset services in Florida for CB Richard Ellis, said owners should be diligent in eliminating such clauses when lease are being renegotiated.”

A session on recession tactics also brought out some great information:

“CBL is riding out the storm by repositioning anchor stores, inking unconventional tenants while seeking more appropriate permanent tenants and adding new income sources to existing properties such as hotels and offices. It is also paring its number of regions from eight to seven, reducing staffing and becoming stronger asset managers. Those measures and others will spell a $30 million difference on CBL’s 2009 bottom line, Lebovitz said.

Neihaus pointed out that industry pros ‘will learn more in this recession that they ever would on the upside.’ Maurin said Stirling Properties ‘has gone back to the basics. It is like preparing for a hurricane. You never sleep. We are operating 24-7. And there is no such thing as over-communication.'”

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