Mixed signals in commercial real estate call for renewed emphasis on data-driven strategies, advises A&G chief
MELVILLE, NY, December 8, 2021 / PRNewswire / – Mixed Market Signals Highlight the Need for Turnaround and Restructuring Professionals to Focus Even More on Data and Analytics in Commercial Real Estate Projects, Writes André Graiser, co-chair of A&G Real Estate Partners, in the December issue of the Journal of Corporate Renewal (JCR).
Graiser’s feature article in the December issue of JCR – “Hopeful Signs and Dire Omens: The Complex Calculus of Real Estate Optimization” – Cost Reduction and Lease Negotiation / Termination. JCR is published by the ChicagoRecovery management association based.
Graiser begins the article with an overview of retail dynamics, where owner flexibility, smart coping strategies, and strong consumer demand have translated into remarkable success for many operators. And yet, he observes, “this industry continues to be marked by growing concerns about supply chain disruptions, online competition, employee shortages, construction expenses / delays and winter wave of COVID-19 “.
Likewise, the office market continues to exist in “a state of limbo” as tenants try to figure out what workplaces will look like in the future. Nevertheless, occupants of secure offices in many cases show a renewed enthusiasm for creative arrangements with owners. “The flexibility of owners is one of the reasons why observers of the offices of New York City and other markets are seeing increased activity among occupants who need 10,000 square feet or less, “writes Graiser.” These landlords don’t necessarily lower rents, but they offer much more free rent and are generous with tenant allowances.
Finally, theaters are showing progress that would have seemed unthinkable just a year ago, but piracy and video streaming continue to challenge the industry. “As they work with their owners on lease renewals and other negotiations, theater operators need to guard against the premature perception that ‘things are going well’ in the movie business again,” writes Graiser. “It will take more than a few blockbusters for this heart-wrenching end to end.”
In conclusion, the veteran real estate executive advises turnaround and restructuring professionals to challenge their clients’ long-held assumptions about real estate strategy. For example, operators who have always resisted store closings may want to rethink this position. “The demand for space is strong. For retailers, this might be a good time to look at the bottom 10% of the worst performing stores in the portfolio and consider exiting at costs that could be significantly lower than the same time period last year. “
Likewise, owners continue to be flexible, creating opportunities for turnaround and restructuring professionals who represent companies in extrajudicial contexts. “One of the lessons homeowners learned in 2020 is that constructive engagement can make a real difference in whether key tenants survive.”
As the real estate industry progresses in the fourth quarter, Graiser concludes, “Turnaround and restructuring professionals need to sit down and carefully consider all the signs of hope and bad omens involved, and make smart, based bets. data on behalf of their clients ”.
The full article is available at:
Melville, New York StateA&G has saved more than 650 customers 8 billion dollars occupancy and other costs and has sold real estate and leases worth $ 12 billion. Global M&A Network named A&G “Real Estate Restructuring Firm of the Year” for its work in 2019 and 2020. https://www.agrep.com/
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SOURCE A&G Real Estate Partners