Update #1: Waiving The Cautionary Flag
Landlord friends, clients and colleagues:
There is an existential threat to the health of our retail and restaurant community that is upon us based on the spread of, and efforts to contain, the COVID-19 Coronavirus. Accordingly, we are sharing the following sentiments and realities in an effort to update you re: the conversations we anticipate you will be having with tenants today and into the coming weeks. We also want to communicate our strong expectation that despite the good-faith messaging of the last 48 hours from many retailers stressing that we as a community can sustain these small businesses in the near-term by ramping up our shopping/dinning at their establishments, it will likely not, in fact, be enough.
We believe it is necessary that we, as a real estate community, immediately grasp the gravity of the threat to the retail and service businesses in our projects and neighborhoods and act swiftly to accommodate as best we can, understand, and respond to inevitable requests of relief from tenants. Some of these asks will be economic in nature and others will simply be operational (i.e. waiving go dark provisions and/or minimum operating hours, etc.), but the requests will be coming if they haven’t already.
We have had many conversations in the past 72 hours with restaurateurs whose sales are down 50% from last week. Private events are being cancelled as companies implement important “work from home” policies. Catering orders have been cancelled. Lunch rushes are gone. People are not shopping for non essential goods… Complicating this drastic drop in business will be challenges obtaining necessary goods and materials (such as takeout supplies and cleaning supplies) in the coming days along with labor shortages due to school closures and potential travel restrictions.
In sum, our retail and restaurant community was not ready for this, nor I’m sure are many of us, and small businesses will need landlord understanding and cooperation as they make real-time pivots to operating procedures, growth strategies, and general day-to-day norms that position them for long-term survival.
In the coming days we will use our blog and other online communication tools to share updates and perspectives from our restaurant and retailer friends, in addition to working hard to develop tools and approaches that help our landlord clients and partners evaluate and reasonably respond to tenancy and leasing related challenges as they arise. In the meantime we wanted to provide you with some perspective here to brace you for the conversations you will be having with your tenants. We don’t have all the answers, and we know there will be corresponding hardships and disruptions to us all, but we view it as our obligation to waive this flag of caution for you prior to this weekend.
As always we are here to offer creative solutions as we collectively seek to support our local small business community in this time of intense need and ensure we come out of this crisis with healthy and strong retail and restaurant tenants for many years to come.