Street Retail Looks to Malls in Figuring Out Ways to Cope With Big Rents
While malls and shopping centers are looking for ways to save themselves from crushing retail headwinds, at least one group thinks they’ve got something to learn from them: street retail.
The guys with the shops on the sidewalk are taking a page out of their playbook when it comes to structuring deals.
Young retail companies, e-commerce brands and even some legacy retailers looking for a brick-and-mortar presence are asking for terms long found in shopping centers—low base plus a percentage rent (meaning the retailer pays the landlord a certain percent of every dollar in sales over a certain threshold).
These deal structures aren’t confined to less trafficked and less high-profile areas of the city.
Lee Block, an executive vice president at Winick Realty Group, said that while he hasn’t closed any deals that incorporate a percentage-rent component, “we’re considering it on a handful of spaces that we represent.” That was the message conveyed by many brokers and landlords with whom Commercial Observer spoke.
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Winick Realty Group is one of New York’s prominent real estate firms specializing in retail leasing and advisory services. Over the years, Winick Realty has served a broad range of domestic and global clients, with a strong emphasis on long-term representation and expansion and growth strategies. Winick Realty Group is highly recognized as a forerunner in the retail real estate market.