CHICAGO (CBS) — Many retailers are struggling during the pandemic, and the trickledown effect hits their landlords. Fewer sales means trouble paying rent.
The CEO of a real estate giant offered to talk with the CBS 2 Morning Insiders, adding “no questions are off limits.”
“I’ve been in the business for almost 17 years now,” Seashell Restaurant owner Mike Albanna said. “I’ve never had this kind of situation.”
His restaurant at 95th and Stony Island didn’t just get hit with a one-two punch. Albanna said it was a three-punch combo.
First, sales plummeted due to COVID-19; then the restaurant was looted in early June; finally, strong winds ripped off his sign.
On top of all that, he couldn’t get approved for a Paycheck Protection Program loan.
“I don’t know what is going on. Everything says not eligible. We’ve been trying to work with everybody, but I still have to be here. So I can’t just quit my job just to follow up with that,” Albanna said.
Many of Seashell’s neighbors are still boarded up, even some that are open. The shopping center is owned by NewMark Merill Companies, which oversees three shopping centers and about 400 tenants in Chicago alone, according to CEO Sandy Sigal.
Sigal said, nationwide, about 850 of his tenants have requested rent relief due to the pandemic.
CBS 2 asked if he has any concern that he might have to evict some people if they aren’t able to pay the rent eventually, or if that has happened already.
“The vast majority of tenants we work with, we figure something out,” he said.
Sigal said he’s been able to work deals with most of them to defer or restructure their payments, but he asks his tenants to meet him somewhere in the middle.
“I don’t know that we’ve actually physically evicted anybody, but I know there’ve been tenants we’ve gone to and said, ‘Listen, we’ve gotta have teamwork here. Let’s work together,’” he said.
Sigal said hundreds of his clients landed PPP loans, but hundreds of others who are also eligible did not. He said part of the problem is banks handled applications, and not every small business has a close relationship with a bank.
There could be more federal funding on the way, and Sigal said he has some requests.
“Stop changing the rules, make it much easier for them to apply, and make sure they understand where to get help. Budget some money so that they can get assistance to fill out those forms,” he said.
NewMark Merill itself did get a PPP loan, which Sigal said is one reason they’re able to provide some leeway on rent.
“We had a little bit of a struggle, but the landlord is very helpful, and we’re trying to catch everything back up and stay on top of it,” Albanna said.
Fifteen minutes into our interview, right around 11:30 a.m., a customer finally walked into Seashell.
“We basically went through all our reserves just to stay afloat. We didn’t cut down any of our employees,” Albanna said.
That was on a Friday, typically their busiest day before COVID reared its ugly head; or, in Albanna’s words, “We just got 2020’d.”
Albanna is working with his insurance to cover the looting damage. As for the COVID-19 losses, he has no coverage.
And the storm damage does not meet his deductible.
From CBS Chicago. Click here for the full article