New centers hold higher costs for tenants
As 20th Century malls give way to 21st Century mixed use centers, retail tenants need to arm themselves against giving away too much away during lease negotiations.
That’s the caution of National Retail Tenants Association director Paul Kinney, who strongly advises retailers to consider both long and the short-term implications of the leases they sign.
“For tenants, this transitioning period means serious risk of overcharges from incorrect allocations due to expanded and reconfigured centers, or added uses which are more complicated and time consuming to keep track of and reconcile,” Kinney said.
Just as landlords have the freedom to change the mix of stores in their centers as trends shift, Kinney pointed out, so should retailers retain the right to employ a different name or merchandising strategy geared to a specific property.
The association chief added that establishing occupancy cost review processes is essential for retailers looking to avoid costs passed through in common area maintenance charges that are pooled and allocated with office and residential spaces in mixed-use projects.
“The retail of the future will look very different from what we see today,” Kinney said.
These and other crucial topics for tenants in a changing retail environment will be explored at NRTA’s annual conference beginning in New Orleans on Sept. 24.
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