NEW YORK – February 2021 – What a year 2020 was!! It had already been obvious that mall traffic, pre-COVID, was declining sharply and e-sales had been increasing rapidly as consumers preferred the convenience of the internet. This had resulted in the commonly held thought by many retailers that they were over capacity in brick and mortar by what we estimated to be as much as 25%. Then came the unfortunate advent of COVID which only exacerbated all the underlying problems in brick-and-mortar concepts.
Since March 2020 we have seen COVID reshape the retail landscape as consumers have further adjusted the way they shop. E-sales have grown even more, and it leaves us to question the importance and relevance of brick and mortar. Mall and overall store traffic has dropped to a fraction of what it was.
The answer lies within a true and fair partnership between landlords and tenants: One that harnesses the needs of both parties to create a profitable business and at the same time service the ever-changing needs and wants of the consumers. The adversity that has existed between the landlord and tenant has fueled the crisis and without compromise more and more retailers will go away and there will be fewer and fewer new tenants to fill the myriad of vacancies that exist today.
We believe more creative lease models must be implemented, such as variable rent rates that can be adjusted based on revenue increases and declines. If malls are closed for any reason, the landlords must share the burden of the rental obligations, not just by deferring rents but by abating them. Retailers carrying the full load of mall closures has left many in dire straits and this lack of cooperation from the landlord community is NOT sustainable. Innovative retail concepts MUST be developed that are AMAZON-proof while providing consumers with new purposes to visit the mall.
With these and other partnership initiatives, we believe the relevance of physical stores is needed, wanted and most important sustainable. RCS has partnered with retailers and restructured over 8,000 leases in 2020 alone. We stand ready to help you navigate through these turbulent times, like we have been doing for over 40 years.