Straight pct deals - lls doing them? Calling retail brokers and owners
For my retail brokers/owners - how often are you seeing this deal structure? Pros and cons of such a structure? We have a national retailer interested in a suite but only willing to do straight pct rent. Why would anyone other than a desperate mall owner do it? Explain like I'm 5
[{"id": "hdvwluc", "text": "Pre Covid I would have been LMAO. Post Covid if that\u2019s even where we\u2019re at it\u2019s an interesting concept. Wouldn\u2019t be surprised if more National retailers took this approach. I\u2019m sure lenders would love this deal structure lol", "replies": [], "depth": 1}, {"id": "hdzfuph", "text": "SoCal retail leasing broker here. The only reason to sign pct rent only deals is to land a tenant that is out of the site\u2019s league. Mall anchors being the exception(depending how sexy the mall is). It is essentially a loss leader to bring in other sexy tenants at higher minimum rents. H&amp;M being a prime example of a tenant that does this. That said, they are still EXTREMELY rare. I do 100+ retail leases a year with 50 or so of that being traditional national credit deals and I haven\u2019t don\u2019t a pct rent only deal in the last 3-4 years. Pct rent in addition so a artificially lowered rent floor for restaurants is starting to be a bit more popular but still only 4-5 of those per year for me. I\u2019m sure this varies a lot market to market but in SoCal this is the case. Hope it helps!", "replies": [{"id": "hes4g4s", "text": "Interesting! Do you think pct rent will gain popularity in retail over time?", "replies": [], "depth": 2}], "depth": 1}]