Restructure retail lease and debt
The challenges facing retailers today have never been more demanding, but the resources to help are a whole lot better.
In the midst of change and uncertainty, there are still options to build profitability and create value through lease and debt restructuring.
With retail changing faster than ever, healthy, stressed and distressed retailers alike have a growing need to avoid or navigate bankruptcy.
Let us handle your asset strategy, so you can focus on what is critically important: managing the brand and serving customers.
Strategically assess and manage your real estate portfolio and its inventory, to avoid or manage retail bankruptcy.
Improve return on assets and reduce pressure on distressed companies for increased liquidity, reduced costs and optimized real estate liabilities.
Minimize risk and protect your core business liabilities while increasing the probability and efficiency of accomplishing debt, lease and royalty-related workouts.
Turn your business around in 2021
How to ensure your real estate portfolio is operating at peak performance
Even in the midst of market challenges, there are opportunities for growth. Reducing costs, evaluating your real estate options and creating a portfolio optimization strategy can ensure your real estate interests align with your bottom line.
Discover three different approaches top-performing retailers are taking to navigate financial flexibility:
Think about terminations
- Consider ending your lease if your business is losing at or more than its occupancy cost, making the losses unsustainable. It’s important to address the occupancy costs of any location that is unprofitable.
- Identify the maximum amount you will need to pay to terminate a location.
- Before negotiating a termination, consider how aggressive you are willing to be and if you are willing to default. (Understand that defaulting on your lease can create financial and legal consequences.)
Win-Window of opportunity
- Identify current market rental rates and the level of occupancy cost you need to justify to keep that location as a part of your portfolio.
- Make a proposal to your landlord(s), ensuring whatever concessions you’re seeking are clear and concise.
- Follow up consistently.
Leverage your lease
- Develop proposals that offer to extend your lease term now in exchange for benefits such as rent reduction or tenant improvement allowance (e.g. A blend and extend strategy, allows you to extend your lease length for more favorable lease terms.)
- Identify your 20/50 locations - 20% of the stores account for more than 50% of the profit. These locations are typically safe from competitive intrusion, provide leverage within your portfolio and are candidates for blend and extend.
JLL + Gordon Brothers = A strategic alliance
Walter Wahlfeldt, EVP of Retail Corporate Services at JLL, discusses JLL's new solution for the real estate and inventory challenges facing retailers. JLL and Gordon Brothers have joined forces to provide retailers with the best combination of expertise to strategically assess and optimize retailers’ assets.
JLL's Tom Mullaney
Restructuring lease and debt is a complicated issue. In this video, Tom shares the steps he has taken in the past to assess problems, solve for complexities and bring forward opportunities for increased profitability.
JLL's Mark Richardson
Lease and debt restructuring can come with people-driven complexities. In this video, Mark shares the benefits of leveraging existing trust-built relationships, and shares the various relationship-driven dynamics that can occur in a lease and debt restructuring scenario.
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