Owner of 4 local shopping centers gives advice for tenants, thoughts on retail’s future
Landlords are facing their own challenges from Covid-19,ranging from rent discussions to keeping retail centers clean and safe.
Sandy Sigal is CEO of Woodland Hills-based NewMark Merrill Cos.Inc.,which owns or manages retail centers in more than 45 cities in California, Colorado and Illinois. NewMark Merrill owns four centers in the Sacramento area:Madison Marketplace in
Fair Oaks, Marketplace 99 in Elk Grove Southgate Plaza and Valley Mack Plaza, both in South Sacramento.
We asked Sigal about how he’s dealing with the pandemic,and how he expects it to impact retail’s future.This email interview has been edited for length and clarity.
Have your Sacramento-area centers seen any unique challenges during the pandemic?
- “Unfortunately,since the pandemic is impacting every area around the globe,our challenges are very similar.Keeping our centers clean,well lit and secured even with over 50% of the stores being closed.Making sure those who visit the essential needs merchants are safe and feel comfortable visiting the stores.And making sure we keep our neighborhoods,businesses and community leaders apprised as to what is going on.”
Have you offered rent concessions at your Sacramento-area centers?
- “We have really worked hard to support our small businesses.That means if a business needed some support until they could get their PPP or other loans funded,we worked with them on timing.If they are closed and needed to work out a payment plan,we did the best we could relative to our ability to be supportive.An Important element has been working with our major,larger tenants to make sure they paid their rent,as their funds help us support our smaller tenants.We have reached out to every retailer,offering them help to apply for government support ensuring we give each user visibility on our social platforms, working with them on their reopening plans. Our No. 1 priority is getting our tenants through this crisis and getting them back open to service our communities.”
How many tenants in your local centen paid less than their full rents in May?
- “Don’t know about May yet,but in April we received about 55%.“
Do you have any general advice for tenants having difficult conversations with their landlords right now?
- “Be honest and straightforward and share the good and bad news. We all know the state of play: The pandemic is a real thing and no one is to blame. The key is to use this as an opportunity to be sincere and share what you need and why you need it. Also be aware the owners of buildings generally are,like us,small businesses themselves. Understand we have the pressure of having to pay our bills,our mortgages, and have investors who live off returns that no longer exist. If you are balanced and fair and clear about what you need and why you need it, you should have a great chance of success and more importantly will be able to have a long-term relationship when this is over.“
Several of your centers in the Sacramento area rely heavily on restaurants.Are you worried about significant changes to the restaurant industry after the pandemic?
- “I love our local restaurants and most of them adapted really quickly in providing takeout and delivery. They are part of the fabric of the community. If they can make it through the closures, and the limitations on reopening are not too severe,I hope the damage will be minimal and the upside will be they have perfected another way to deliver their product through their takeout systems. No one works harder than restaurant owners,and I know many people whose first stop after the stay-at-home order is lifted is going to be visiting their favorite place to eat.”
Are you aware of any businesses in your local centers that likely won’t make it through the pandemic? Are you working on marketing any of those spaces now?
- “We are tracking very closely tenants we are worried about. I don’t want to create a self-fulfilling prophecy by predicting who they will be. We will fight as hard as the tenant themselves to help them reopen if they can.”
Two of your local centers have notable vacancies: the former Food Source space in Valley Mack Plaza,and the former Walmart Neighborhood Market in Southgate Plaza. Do you have updates on those spaces,and will the pandemic pose any additional challenges to filling those vacancies?
- “Definitely having a pandemic in the middle of your re-leasing efforts is not helpful for filling space. We had tenants for both those spaces we have been looking at- and we felt very good about both spaces as they are well located in centers with great tenants. Unfortunately, expansion plans for tenants are going to have to wait while these businesses reopen. The sad thing is the Food Source closed right before the pandemic and they would have been a great resource to the neighborhood.”
Do you expect Covid-19 will lead to any cosmetic changes in your centers? There’s been talk of shopping center owners designating more parking spaces for curbside pickup,for example.
- “Absolutely- we are definitely going to learn from this. Curbside pickup,which is really parking lot pickup, will be added to many of our centers. It is a great entry point for people to come back but not have to go into the stores. It is convenient and many tenants have adapted to that process. Also using more of our common areas as places where people can eat if they don’t want to be inside spaces for a while,as well as lots of opportunities to wash hands, get masks and have better ways to access the stores they want to with proper spacing.”
What’s the biggest way Covid-19 will change how you do business as a landlord?
“Not a change but a reminder. We are all in this community together. Everyone’s success is linked together,and we need to be conscious of our roles and responsibilities. These small businesses create the character of neighborhoods and we want them back,successful and safe. Our role as a shopping center operator,I never like landlord as a term, is to provide the best environment to help facilitate this.”
From Sacramento Business Journal.
Click here for the full article.