Temporary Treat
Blue Christmas for Games
In Dow We Trust
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In some cases, the temporary stores help resolve issues with lease-agreement clauses known as co-tenancy.
With co-tenancy agreements, smaller retailers can get guarantees that the landlord will quickly replace an anchor tenant that left, continuing to draw business to the center. Landlords used these clauses to attract and retain tenants when the market was performing well.
But when bankruptcies, underperforming store closures and debt issues with national tenants drove away anchors such as Linens ’n Things and Circuit City, landlords were in danger of having other tenants exercise their clauses, which are based on the landlord being able to backfill the empty anchor spaces within a certain time frame, Rodriguez said.
Exercising the co-tenancy clause means remaining tenants only have to pay rent as a percentage of sales until the space is filled, bringing in even less income to the landlord, or eventually they can terminate their lease. “The short-term lease could save some landlords because it restarts the clock,” Rodriguez said.
Rose, of Gags & Games, declined to share company revenue, nor did he discuss financial terms of lease agreements. However, the company pays market rates on rent, he said.
Rose said in addition to paying market rates, his firm leaves the spaces cleaner than it finds them. “That helps us establish relationships with landlords and tenants. We want to be able to go back over and over again.”
Meanwhile, consumers nationwide are expected to spend $4.75 billion this year on Halloween, down 17.7 percent when compared with the $5.77 billion reported last year, said the National Retail Federation’s 2009 Halloween Consumer Intentions and Actions Survey.
Despite that prediction, Rose said his firm anticipates a slight uptick in sales this year, since Halloween falls on a Saturday. “We expect this to be a very good year.”
Anjali Fluker writes for the Orlando Business Journal.
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