May 20, 2020
By Dennis Kaiser
The retail industry is experiencing severe challenges, and NewMark Merrill’s President and CEO Sandy Sigal believes in addressing issues head on. The company is one of the fastest-growing, privately-held developers and owners of shopping centers in Southern California, Colorado, and Illinois, operating roughly 80 properties valued at more than $2 billion. Sigal discusses the current retail market, including the state of rent relief, getting retail back to normal, store closures, and PPP, in our latest 3 CRE Q&A.
Q: Why are government relief programs important to the retail recovery?
A: Government relief is going to be critical at all levels to get small business through this crisis. The PPP program was a good start as it gave basic short-term support to tenants. Unfortunately, its restrictions limited it usefulness. What is the point of giving these businesses 60 days to spend the money, and requiring 75% of it to spent on payroll, when in most cases the tenants are not even open? Wouldn’t it make more sense to let the retailers spend the money when they re-open and give them the flexibility to spend it on rent and supplies? Further, as the re-opening will be choppy and may include periods with limited business, there should be a longer-term recovery fund that these businesses can tap into to subsidize rent, marketing and staff. Canada introduced a plan which is very interesting that gives forgivable loans to landlords who can use those loans to defer and forgive tenants’ rent, which benefits the entire food chain – it allows the aid to tenants, supports the payment of mortgages and provides resources to landlords which are being used to support local vendors.
Q: How are you supporting your retailers onsite and operationally?
A: We are continuing what we did before the crisis broke. We use our technology to identify the location of customers and competing sites. We use our printed and online marketing and outreach to ensure that our tenants’ storefronts extend beyond their physical dimensions. For this crisis, we are communicating regularly with our neighborhoods and our community leaders, so they know the status of operations of our tenants. We have put together an opening guide highlighting tips on how to succeed, and open safely. And we are building out our signage, spacing, outdoor setting and other safety measures to ensure our shoppers always feel safe and we have different ways that the customer can engage.
Q; What hidden challenges will retailers face in the coming months, and how will NewMark Merrill help them to overcome them?
A: Customers will once again form a first impression. And, they will be forming that with retailers, restaurants and service providers who have never operated this way. We need to work as a team, set expectations for our neighbors, and make sure we know what is working and not working. The teamwork between tenant, landlord and the community will be tested but there has never been a better time to build a strong alliance.
For comments, questions or concerns, please contact Dennis Kaiser