COVID-19 brings complications to retailers—and their property managers.

by Raleigh Magazine | Mar 30, 2021 | April 2021, Buzz

Laura Guidry

The relationship between a tenant and their commercial property management company can be complex in the best of times, but mix in a historic pandemic and enter a whole new level of complexity.

COVID-19 has undeniably pushed businesses to the brink—rendering them in desperate need of rent relief (not to mention copious amounts of hand sanitizer and masks). For local major shopping centers North Hills, Village District (formerly Cameron Village) and Crabtree Valley Mall, each property management company has approached rent relief and lease renewals on an individual basis. For some, the relationships deepened; for others, it was severed.

North Hills
At Quail Ridge Books in North Hills, there were a few details from the onset of the pandemic that became game-changers. Amazon stopped shipping nonessential items, and Quail Ridge offered free shipping for its books and curbside pickup—garnering a whopping 3,000% surge in online sales. Additionally, its property management company, Kane Realty Corporation, stepped in and was flexible with its rent terms, offering a cushion of support while Quail Ridge waited for its PPP loan to come through. Quail Ridge Books manager Jason Jefferies credits this flexibility as crucial for the bookstore’s survival, as it allowed them to prioritize safety over commerce, giving them the ability to successfully navigate the past year-plus.

Stacey Buescher, director of operations for Kane Realty, found herself unexpectedly thrust into this new world as well. “It was a hope and a prayer,” she says about the early days of the pandemic. As a working mom of two, Buescher juggled everyone’s needs in a delicate balancing act that, in the beginning, looked more like triage. When the CDC released its COVID-safe recommendations, Kane Realty went to work to implement them. Hand-sanitizing stations went up; signage was ordered; air filters were upgraded; and foot-pulls were installed on the bathroom doors. Sinks that weren’t already touchless were replaced with touch-free ones, and—once the chill set in—outdoor heaters were sourced. The parking lot was also renumbered to ease customer curbside and pickup orders.

For Buescher, it was crucial to make sure people would still be able to shop at North Hills in a safe way to enable retailer survival. “At Christmas, I told my tenants, if y’all want me to dress as an elf and stand in front of your store, I will do it,” says Buescher. Now, over a year out from the start of the health crisis, it looks like life—and a sense of normalcy—is returning to North Hills.

Crabtree Valley Mall
At Crabtree Valley Mall, Marketing and Business Development Director Melissa Timney says the five-year projected decrease in retail played out in rapid speed over a mere six months, resulting in a need for multichannel sales approaches (e.g. digital, social media, by phone, in-person) for national and small business tenants alike.

Timney and her team worked closely with stores at the mall to offer more contactless ways for customers to shop and expanded e-commerce options, including curbside pickup. Now, Timney says, they’re seeing stores invest in digital initiatives and place a bigger focus on personalization with sales and in-store specials, including VIP experiences during less busy times of the day. And to expedite the safe return of in-person shopping, Crabtree adjusted floor plans to make it easier for guests to maintain a safe social distance.

“Overall, we’ve seen stores at Crabtree meet customers where they are comfortable, with the understanding that this pandemic will pass,” says Timney. “With vaccines becoming more widely available, we are already seeing the positive effects at Crabtree, and that’s a good sign.”
“It’s been an important reminder to—even during difficult global times—stay in a creative mindset, be nimble, and keep it fun to find joy in every day,” she adds. “It’s how we move forward.” And it’s safe to say that we’re all ready to move forward now.

Cameron Village
For Village District, owned and operated by Regency Centers, the year has no doubt been a tumultuous one, dealing not only with pandemic-related closures, but also a historic name change.

While most tenants don’t want to talk about the specifics of their relief, (understandable given they are constantly in negotiations with their commercial property management companies and dependent on them for their spaces), with rent relief being negotiated on an individual level, it is difficult to pinpoint where talks fall through.

For Cheshire Cat Antique Gallery in Village District, the first month of the pandemic was difficult, to say the least. “I hate to say it,” says June Hastings, dealer and manager of the art gallery, “but we were pretty much left on our own with this. After we asked, Village District allowed us a month’s stay on rent, but, while we were hoping they would forgive the month, we had to pay it back in increments.” For their part, Cheshire Cat shifted to selling its wares online and forgave a month’s rent for all 100-plus vendors.

Village District’s Crunch Fitness is proud they were able to keep its management staff paid throughout the pandemic; however, being closed for seven months impacted them severely. “At the time, we were hoping that it would just be a month. … It turned into months upon months,” reflects Crunch Fitness manager Emily Muirbrook. “For us, we did not receive any support as far as our lease.”

Seeing the writing on the wall, mainstay K&W Cafeteria closed down its super-popular Village District location, recognizing that, for its core customer base, dining out would not look the same for a long time. “We had a long and productive relationship with Regency,” K&W’s Dax Allred shares, noting that, at the time, it was early enough in the pandemic that they hadn’t had conversations with Regency Centers about rent relief.

On the other end of the spectrum, decadelong tenant Cantina 18 was able to find a way to partner with Regency Centers to help its business survive, expanding its outdoor space and awning, and installing permanent heating fixtures. This is not to say Cantina’s year wasn’t full of struggle. “I worked in New York City when 9/11 hit and parlayed that experience,” says owner Jason Smith. When restrictions were implemented last March, “we closed for only one day,” adds Smith, “then reopened for curbside,” but staff had to be reduced down to 20 to 25% percent.

While the full effect is yet to be seen, some pandemic trends will stay with us. “Many trends for 2021 are going to be a direct result of how businesses had to stay operational during the pandemic,” says Eric Davidson, senior manager of communications at Regency Centers. “Digital efforts are going to still be extremely important to reaching a customer, as is prioritizing health and safety. We’ve actually seen a lot of continued momentum for merchants and physical retail space.”

Ultimately, the pandemic has been a learning experience for everyone… all of us forced to blindly navigate through the federal and local governments’ guidelines—though perhaps no one understands what it has meant to pivot and scrap to survive more than small business owners, forced to find ways to operate, pay their staff, and dealwith rent and leasing issues while their storefronts were closed. Let’s just hope that we all learned a thing or two and—in the horrific event that something like this happens again—we’ll be more prepared.