Nearly 30 years ago, when Limited Brands founder Les Wexner decided the huge parcel of land he owned off of Interstate 270 in Columbus would make a better retail destination than a distribution center, his plans for a combination of shops, restaurants, hotels, and apartments made some eyes roll. Today, Easton Town Center, co-developed by The Georgetown Companies and Steiner + Associates, serves as one of the world’s largest and most successful examples of mixed-use real estate. Wondering how Easton’s fared during COVID-19, we talked to its developer, Adam Flatto, CEO of The Georgetown Companies.
How’s Easton operating at this stage of the crisis? What’s open and doing well and what’s not? Are you going to lose many tenants that have entered Chapter 11?
We’ve been extremely well received by customers. We’ve been drawing up to 75 percent of last year’s traffic and that’s without the theaters being open. The fact that Easton is an outdoor project has helped us. You can spend some time here with much less risk than you’d have at a traditional mall. Our tenants have largely taken a collaborative, creative approach and our management team has worked to evolve operations incredibly quickly to put health and safety first.
COVID’s been terribly harsh to commercial real estate. There’s been a 300% increase in loans and mortgages being assigned to workout specialists. Have you gone that route?
Easton was able to leverage its long-term financial strength with all of its lenders, including CMBS, commercial banks, and insurance companies, to develop a special service arrangement that includes deferring interest payments for a number of months. We were not in a position where we were forced to do this. Ohio Governor Mike DeWine urged lenders to enter into agreements like this and we called our lenders and proposed it. They were eager to negotiate the arrangement and I think we were the first to do it here. This allows us to be more flexible and support the 250-plus restaurants and retailers that call Easton home.
Mall of America has missed three mortgage payments and entered into a forbearance agreement. CBL has worked out a restructuring and will use Chapter 11 to increase liquidity. Was Easton ever in danger of foreclosure?
Easton was never in danger of foreclosure. There is a misperception out there that special servicing must mean that foreclosure is in the cards, and that’s just not the case. In fact, the restructuring agreements we entered into were a proactive move on our part to allow our team to be more creative and flexible to each tenant’s current situation and needs. This way, our restaurants, retailers, and service providers have a more long-term strategy to remain active while we all weather the COVID-19 storm together.
Are there other large developments that have done this?
Absolutely. Developers working with trusted lending partners to reach creative solutions that are in the best interest of all parties is not a new phenomenon. It’s been a common practice in the real estate industry for decades and several prominent malls and developers have taken similar approaches.
Let’s end with some positives. What are some things Easton has going on that you’re really happy about? How do you feel you’re positioned for the holiday season?
Twenty-eight years ago, we and Les Wexner set a course for this project that was going to be different from enclosed malls. There was to be a strong entertainment and lifestyle emphasis. We had hotels and apartments. It was something that was unheard-of back then. What’s happening here now shows us what a great decision that was. Heading into December, we are all hands-on-deck to cultivate the innovative, safe, community events that the Columbus market has come to know and love at Easton.