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

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The coffee giant, which is facinf an extremely challenging year as the economyundercute consumers’ discretionary spending, says it began negotiating with U.S. landlordzs in January and that the discussions aboutconcessions “We are pleased with the resultsa of that effort to date and have since worked closelyh with several of our landlords to find solutions that are mutually beneficial,” a Starbucks spokeswomanj said, adding that there is no widespread, set number in rent reductiomn the company is asking for. Other big retail chainsw have asked landlords for similar rent including , and , amontg others.
Rent cuts and other leaswe concessions were the talk of the convention held in Las Vegas from May 17 toMay 20, said Harolf Shumacher, president of the restaurant brokerager firm Companies like Starbucks that were on rapid growth signed leases at the peak of the marketg and paid a premium for prime locations, Shumachetr said. Now that sales have plummeted, restaurateurds and retailers wantlowetr rent. Dallas-based jeweler Zale Corp.
(NYSE: ZLC) said May 27 it will seek rent reductionx across much ofthe company’s portfoli and close stores where the concessions don’t Pier 1 Imports (NYSE: PIR) said April 7 it has been workinb with its landlords to negotiate store rental reductionz and has been able to achieve $6 million in rental reductions for fiscal 2010. Dallas-based Blockbuster Inc. BBI) hired accounting and consultinh giant to help it negotiatrewith landlords. Blockbuster wants to reduce thenearly $400 millio n it pays annually in rent. , a mall-basedf apparel retailer (NYSE: CHIC), says it’s having “constructive conversations” with landlords.
As of April, management said the company had achievedabout $2 million in rent The concessions create a dilemma for Atlantas landlords. Big national retailers like Starbucks are vital to shoppinhg centers because they draw consistentfoot traffic. Many Atlanta retaik landlords will have to consider granting therent cuts. In a smal l strip center with a Starbucks, the national coffee chain may be the big draw for othetenants “and you don’t want to lose said Mike Puline, vice president of leasing for ’e Southeast office in But metro Atlanta commercial property valuee are plummeting anywhere from10 percent to 50 percent as rental incomes decline and vacancu rises to its highest level in a decade.
The situatioj is putting pressure on retail investorsand owners, whosed storefronts once posted advertisements of special sales. Now, they are more oftenh posting signs for vacant Retail vacancy in Atlanta has climbed to almostf 11 percent compared withabout 8.5 percenft in the second quarter of 2008, according to Rentalk rates have fallen below $15 per square foot for the firsgt time since 2007. (NYSE: CBL), a Chattanooga, Tenn.-based owner of mallz including Arbor Placein Douglasville, said it has consideredr concessions for its tenants.
Usuallhy the requests involve some type of quidpro quo, includingg asking the tenant to extend the