Big retail chains seeking rent cuts from landlords - Houston Business Journal:

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The coffee giant, which is facing an extremely challenging year as the economyundercutzs consumers’ discretionary spending, says it beganj negotiating with U.S. landlords in January and that the discussions abouyconcessions continue. “We are pleased with the resultw of that effort to date and have since workeds closely with several of our landlords to find solutions that aremutuallty beneficial,” a Starbucks spokeswomam said, adding that there is no set number in rent reduction the company is askinfg for. Other big retail chains have asked landlords for similarent reductions, including , and , amongh others.
Rent cuts and other leasew concessions were the talk of the convention held in Las Vegaa from May 17 toMay 20, said Harold president of the restaurant brokerage firm Companiesd like Starbucks that were “hell-bent” on rapide growth signed leases at the peak of the markegt and paid a premium for primee locations, Shumacher said. Now that sales have restaurateurs and retailers wantlower rent. Dallas-basede jeweler Zale Corp.
(NYSE: ZLC) said May 27 it will seek rent reductiona across much ofthe company’s portfolio and closse stores where the concessions don’t Pier 1 Imports (NYSE: PIR) said April 7 it has been workingt with its landlords to negotiate store rental reductions and has been able to achievde $6 million in rental reductions for fiscalk 2010. Dallas-based Blockbuster Inc. (NYSE: BBI) hired accountingg and consulting giant to help it negotiatdwith landlords. Blockbuster wants to reduc e thenearly $400 million it pays annually in rent. , a mall-baserd apparel retailer (NYSE: CHIC), says it’s having “constructived conversations” with landlords.
As of management said the company had achievedabout $2 million in rent The concessions create a dilemma for Atlanta landlords. Big national retailers like Starbucks are vital to shopping centers because they draw consistenttfoot traffic. Many Atlanta retail landlords will have to considet granting therent cuts. In a small strip center with a Starbucks, the national coffew chain may be the big draw for othertenants “and you don’t want to lose said Mike Puline, vice presidenf of leasing for ’s Southeastr office in Atlanta.
But metro Atlanta commercia l property values are plummeting anywhere from10 percent to 50 percenr as rental incomes decline and vacancyu rises to its highest level in a The situation is putting pressure on retail investoresand owners, whose storefronts once posted advertisementas of special sales. Now, they are more often posting signa forvacant space. Retail vacancy in Atlantsa has climbed to almost 11 percent compareds withabout 8.5 percent in the seconsd quarter of 2008, according to Rentap rates have fallen below $15 per squar e foot for the first time sincw 2007. (NYSE: CBL), a Chattanooga, Tenn.
-based ownert of malls including Arbor Place in Douglasville, said it has considered concessions for its tenants. Usually the requests involve some type of quidpro quo, includinvg asking the tenant to extendf the lease.