Rent Relief Requests - Publicly Traded Companies - How are you guys handling these requests?
We are a "small business" 40+ properties, 150+ Tenants (industrial, retail, office, multi.). The majority of the rent relief requests we are seeing from Tenants this month (May) is from publicly traded companies - as in all publicly traded companies we have as Tenants aside from Amazon and they are mainly in operating (essential) industrial spaces.

It seems that everyone wants 3 months free rent due to "these unprecedented times". We have struck one deal (1:10 requested right now), telling the public tenant 50% rent for 3 months, with the execution of your 5-year option (basically 1.5 mo. concession on the renewal) - this seem like is a reasonable deal for both parties.

My hunch is that these publicly-traded tenants are "just asking" Landlords to see if there is anything to be had (in fairness someone doing their job) but these are not the companies that need relief like a restaurant or nail salon in a strip mall that has not been open in 3 months. Curious as to how everyone else is handling these inquires. I would personally like to tell the publics to go out to the capital markets and raise the money if your pinched.
[{"id": "fpt49hl", "text": "Are the leases guaranteed by an entity with strong financials? Is there a LOC?", "replies": [{"id": "fpt5a4s", "text": "Each lease is different. In general, yes parent-entity guarantors (where possible). Example company asking for relief: a very large US based coffee company (that has been operating the leased location via drive thru) is asking for three months free rent. They are very profitable and we have the parent signature on the lease.", "replies": [{"id": "fpt6lkl", "text": "They have very little bargaining power than if I\u2019m following correctly. Obviously want to preserve TT/LL relationship as best as possible. Perhaps can give say 3 months free and amortize into their rent at something like 8%?", "replies": [{"id": "fpteuc8", "text": "That sounds reasonable, IF they actually need it. My hunch is they do not. I want to tell them no and that we are a small business and have allocated a pool of relief funds to assist distressed tenants (true) but are giving priority to small businesses as we have a limited amount of capital to work with. \n\nI also desire to keep the relationship in good standing (don't think i'm at risk here).  My hopes are that other Landlords are communicating something similar to Public's so that we're not the only ones taking this stance.", "replies": [{"id": "fptl1yt", "text": "I would stand my ground depending on the tenant. No abatements for any big companies. I would consider deferments on a case by case basis. Honestly you might be better off putting some of these Tenants in default.", "replies": [{"id": "fptx8q9", "text": "Agreed on the default, eviction &amp; BK courts will be backed up for months. Bankruptcies and evictions will be painful for the next 3-6 months at least. Best to avoid where possible.", "replies": [], "depth": 6}], "depth": 5}, {"id": "fpu7pea", "text": "We have made everyone asking for relief prove it to us. Show us all your traffic and revenue, pre- and post- shut down. Don\u2019t just give it to them - make them prove they need it.", "replies": [], "depth": 5}, {"id": "fpupzv7", "text": "I am a landlord rep on a few properties for a publicly traded reit industrial and they are doing the same. Telling smaller regional or mom &amp; pop shops to provide two years of financials and a business plan when they ask but to the big dawgs they say hey we have a balance sheet too, we are prioritizing for smaller people who are in do or die mode right now. If said big company comes back and still asks then we are asking for financials from them too as well as an exercised option and amortized over the remaining of their term at 10% per month.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "fpt80t9", "text": "If you are in the fortunate position of being able to afford a loss of rental income, offer them a break on rent in exchange for a renewal at a higher rent or a rental increase immediately post pandemic. I would push for very favorable terms especially if the company\u2019s stock has taken a sizable hit. \n\nI\u2019d imagine most publicly traded companies are much more focused on next quarter than 5 years from now and will play ball with you.", "replies": [{"id": "fptl76q", "text": "There has been a lot of pushback on exercising options early. We have gotten it in some instances really depends on the tenant, how much term is left and how they are doing in the location.", "replies": [{"id": "fptlit5", "text": "If they don\u2019t agree to it no reason to give them a break on rent IMO.", "replies": [{"id": "fptlr7b", "text": "Honestly it really depends on the tenant and how you value the relationship going forward. There are some tenants we want to deals with in other centers in the future so helping them out a little now might go a long way later.", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fpt4n84", "text": "Allow 3 months of IO payments and tack the principal portion to end of lease or over 12 month period if needed.", "replies": [], "depth": 1}, {"id": "fpt67x6", "text": "We're trying to defer rent and collect it within 2020.", "replies": [{"id": "fptnm57", "text": "Same here, but we are allowing 3 months for recovery and three months to repay each month of the AR.  If we defer April-June, the repayment runs October 2020-June 2021.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fpt6evz", "text": "Executing a 5 year option for only 1.5/months rent in concession does not sound like a good deal for the tenant..", "replies": [{"id": "fptbaw9", "text": "Normally no free rent on a renewal, so they picked up a month and a half vs. nothing, I think it\u2019s a good deal", "replies": [], "depth": 2}], "depth": 1}, {"id": "fptfwd1", "text": "Have you considered accepting their stock instead of cash for these 3 months?", "replies": [{"id": "fptgs2l", "text": "I love the concept (might shoot for bonds first), could be a logistical challenge for the Public to actual do (IR, SEC, ect). Given the red tape that might come with processing this request, this might be my go-to response from now on when I get relief requests from Publics.", "replies": [{"id": "fptrhm7", "text": "Might consider asking for warrants instead of shares. Or maybe defer the share issuance and have it price at the loweat daily closing price during the term of the concession.\n\nOtherwise there's no real upside for you. It's like you're buying shares at full market price.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fptik0m", "text": "Can you ask for proof of hardship that is requiring them to have three months of free rent? I\u2019m sure this is a little trickier in retail since everyone\u2019s sales are going to be down, but for the GSE forbearance requests for multifamily they are requiring borrowers to show hardship i.e. declining collection to the point of breakeven on debt service.", "replies": [], "depth": 1}, {"id": "fptin8i", "text": "I know a decor biz, they are in terrible shape atm. Had to give all deposits back.", "replies": [], "depth": 1}, {"id": "fptj1re", "text": "We are also a mid sized operator with about 6mm SF of retail and another 6mm or industrial. We also own multi family. Across the Midwest, and parts of NE and SE. \n\nRetail collections are running at about 60%. \n\nDeals are being cut across the board and it varies by tenant. Some, like you referenced, are large public ally traded companies with the means to pay (Ross, Best Buy, Panera, etc), others are retailers that are in dire straights and might declare BK. Then, we have the small in-line mom and pops. \n\nIn most instances, were deferring rent for 3 months, but still have them pay NNN. The 3 month deferral is then paid back over a 12 month period beginning 1/1/21. \n\nIn other instances, were telling them 50% base + NNN. Again, payback over 12 months next year. \n\nIn both instances l, were trying to get something ... execute an option, extend term, remove certain co-tenancy clauses, etc. whatever we can get. \n\nFor the mom and pop, it\u2019s \u201cpay what you can.\u201d \n\nThen we have the big guys that are sitting on cash, some of which sent US letters and are being a pain in the ass. We send them default letters. Pay your rent. \n\nAs an aside, we\u2019re always looking to buy. If you have anything you\u2019d consider unloading, let me know! Would love to say I got a deal done on Reddit! Regardless, stay in touch ... these are difficult times and it\u2019s important to share ideas. \n\nBe well!", "replies": [{"id": "fptlylf", "text": "Just curious is Ross giving anything up? They are known cocksuckers.", "replies": [{"id": "fptm2vr", "text": "No :-)", "replies": [{"id": "fptmmc6", "text": "Typical, I would throw them in default.", "replies": [], "depth": 4}, {"id": "fstqadt", "text": "REITs are supposedly getting concessions from them", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "fptzcjm", "text": "Good info - thanks for posting!\n\nAs far as acquisitions, are you guys looking at under construction projects? My sense is some of these new developments will get stretched on their financing and will either have to recapitalize, exit, or go BK.", "replies": [{"id": "fptzhdd", "text": "100% would buy something under construction. We\u2019ve done that a few times in our history. It\u2019s something I\u2019ve been trying to look into again recently. Have anything in mind?", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fptx4ms", "text": "Deferred rent, payback in a year", "replies": [], "depth": 1}, {"id": "fpv3cz8", "text": "Tell them no, and most do pay afterwards. They are just checking if you are dumb enough to agree to something, most of them are not actually in need for anything yet. If they can prove that they are having a difficult time and they are a publicly traded company than giving them a bit or rent free in your unit wont save them, so I would also not grant anything for which you don\u2019t get anything in return.", "replies": [], "depth": 1}, {"id": "fqfkxqx", "text": "Always structure an abatement as a deferral and you can see what happens down the line. You have no ideas how their sales will be + potential  gov assistance. You also don\u2019t want to lose a tenant bc they were just barely holding on and you didn\u2019t grant them relief.", "replies": [], "depth": 1}]