A Beta Perspective - COVID-19

First, I hope you and your family are well despite these unprecedented times. As we learn more about the impact from COVID-19 and the “Shelter in Place” ordinance, Beta continues to be fully operational and committed to serving our clients. Since our inception, we have been equipped with secure cloud-based technologies and all of our resources continue to be remotely available to our clients.Collectively, we have made approximately 1,500 calls last week and have had many informative conversations. We have been intentional in asking a variety of questions to gather as much information as possible given our “boots on the ground” insight for submarkets for California and throughout North America. We encourage you to keep the questions coming whether it be on an industry or site specific level.While existing transaction momentum and volume have been severely impacted this past week, we are pleased to report that many transactions continue to forge ahead. We are working with several retail, medical, and food service brands that are still engaged and want to transact.While we have experienced reduced retail sales in prior economic cycles, we have not experienced temporary store closures on a mass scale. It has been reported that publicly held chain retailers that have closed stores temporarily throughout the US exceeded 34,000 stores and over 600,000,000 square feet.As economic abatement discussions are occurring on many levels, we believe that it is essential to communicate effectively with all stakeholders and that this is not the time to “bury our heads in the sand” and simply wait it out. While each negotiation is unique, the issues at hand are similar in most situations. We suggest that any solutions for short term inducements should also consider other long term concessions to benefit each party.We believe the following are best practices when communicating with stakeholders to address financial and operational issues for landlord, tenant, and lender agreements.

Be proactive, communicate in a spirit of partnership. Be supportive, positive, and sensitive to individual circumstances. Listen to the entire story. Do not wait for stakeholders to reach out to you. Be proactive! Listen to the entire story. This is a unique time and while not everyone will respond in a similar or equitable manner, the approach is essential to being able to inform your other stakeholders.

Educate, review and understand documents governing your business and contractual relationships. Circumstances are changing daily and, in many cases, hourly. The ability to receive financial support from Federal programs, insurance companies, and lenders etc. are going to provide opportunities for stakeholders to recover.

Obtain financial and operational information. Gather sales reports and financial statements including status of existing business plans to review during the “Shelter in Place” ordinance.

Request an offer. Many are just saying “I Can’t”, but it is important to understand if a request is being made for an abatement, a concession or a rent deferral. Whatever it is, get it in writing.

Team approach to problem solving. Use your resources to help make calculated and informed decisions. Beta is a resource to you and will continue to be a trusted advisor today and always.

It is our belief that our nation’s leadership will come together to provide significant financial aid for our industry. A compelling reason to include the shopping center industry is that approximately one in four jobs nationally are related to retail. Federal legislation on the relief bills are circulating to incorporate business interruption for tenants. Please click here and follow the prompt to transmit your message to quickly communicate with your elected officials in Washington D.C. Additionally, Congress is actively negotiating a significant financial aid package that we believe will also have a tremendous impact on lease and loan adjustments. The SBA website outlines a loan relief program.The role of the shopping center has been evolving for several years. Changes in consumer behavior will further accelerate how shopping centers are operated and merchandised in the future. It is more crucial than ever that we have access to real time data and insights to create solutions for common challenges. As concessions are being requested, it will be essential to consider greater flexibility in the operation of shopping centers in the future.Finally, our industry, like our country, is strongest when we work together as a cohesive team. We remain confident that thoughtful communication and goodwill will enable long term prosperity for our industry.As always, Beta is available to you as a resource. We appreciate the opportunity to collaborate with you to overcome the challenges through thoughtful problem solving.Respectfully,Beta