MYKITA in New York, NY with Larry Haber
Guest: Larry Haber
Topics: Leasing, real estate trends
Transcript:
Chris Ressa 0:01
This is retail retold the story of how that store ended up in your neighborhood. I’m your host, Chris ReSSA. And I invite you to join my conversation with some of the retail industry’s biggest influencers. This podcast is brought to you by DLC management. Welcome to retail retold everyone. Today I’m joined by Larry Haber. Larry is a commercial real estate attorney, managing partner of cre at AG MB. He’s been in the commercial real estate industry for over 30 years. He’s got some really cool insights for us. Welcome to the show, Larry.
Larry Haber 0:39
Thank you, my friend. Appreciate the opportunity to be here. You know, I’d like to fill in the blanks a little bit. Some people would call me a leasing interventionist, a reformed yet long recovered developer of commercial real estate still on a few pieces on 120/5 Street in Harlem, but that came about because of a little thing called the Great Recession. podcast host like you. I have an online educational platform for commercial lease training in negotiating called leasing reality master your leasing domain, and having hip hop single out about commercial real estate. And yes, when I want to be boring and pay some bills from Scott Finkel, my goal was Berkson and married for 30 years to the joy in my life. Aptly named Joy. proud father of four boys, few who were in real estate 2727 26 and 21.
Ressa 1:34
Wow, a little different than me. I have two children, a three year old daughter and a two year old son so I’m a little behind you. Oh, the
Haber 1:41
potty just started for you, my friend. It just started but I feel like I feel like it has for me by the way.
Ressa 1:46
That’s great. That’s good. I’m enjoying the party, though. Good to
Haber 1:50
hear. Because yeah, so you were skiing recently did you do something like that? What
Ressa 1:53
I saw, I’m not a skier. But I I skied, like six to eight years old personally. And then I got very big into wrestling, which is winter sport. And there was no time to go skiing. Most weekends, I was in a stuffy gym, and not on the ski slopes. But you know, we’re constantly looking for activities for the children and skiing, snowboarding being outside outside socially distant. Those are some of the activities. So I went with them. Yes, it was. It was awesome. Great sport. Yeah, it is really, it was really cool, great activity for the kids. And we’re constantly looking for things to get out of the house, especially, you know, compounded from COVID. Now the winter, it’s you’re cooped up, we need to get out.
Haber 2:42
Well, soon enough, what’s the song by pink? Let’s get this party started. It’ll happen soon enough.
Ressa 2:47
They? Well, we’re going to talk about top three commercial real estate trends from an attorney’s from an attorney’s perspective, and I’m excited to do that today.
Haber 3:01
So number three, well, I need to preface it by saying this is great if you’re a landlord. You know, I think the commercial lease is arguably the most one sided document in the free world. It’s pro landlord, Energen. It should be because you know, the land was one who takes the risks, etc. But at the same time, what I think is that 90% of this legal document is all business points, if not more, it’s dangerous. It’s just dressed up in a legal die. I
Ressa 3:34
couldn’t agree any more. And we talk about that a lot is what’s business what’s illegal, and a lot of different corporations, some, some corporations, they have the attorney, the attorneys have a lot of say, and in decision making in some organizations, attorneys, give the business folks what the risk is, and tell the business folks, so you got to make the decision, here’s your risk. But this is what your risk is. And it depends on how the company kind of views it. That’s what you just said 90% of the lease is business and it’s dressed up in legal terms. I think that’s a great point. When you say the one sided document, there’s a couple of terms that could make it so favored to the tenant, it’s not even funny, just one little tweak. And you put a single purpose entity as the tenant with with a limited guarantee. And to me the lease is now 100% and the rest of the leaf release is really not relevant because the landlord’s now committed for 1015 years whatever it is, and the tenant can leave in one month it’s a month to month lease.
Haber 4:39
I I’m a firm believer that like with good guy guarantees which are is really just a nasty, you know, three letter word in New York City right now if you are a landlord, because what the city council did not get political, but they basically rendered good guy guarantees semi ineffectual from March 7 of 20 through this coming marching, who knows if that’s going to be extended, you know, part of the thing when you as a tenant are at least smart enough to get a single purpose entity on the hook, you know, as the tenants, if there’s a guarantee, and it’s only a basic, good guy guarantee, you can do the Great Escape, like you just talked about, so to speak, you know, you lose your security deposit, you give notice, and the story. You know what we’ve done on that over the years, because there’s a lot of lunatic attorneys and landlords like, like myself, who have taken these guarantees and objectively lethal doses of legal and business steroids into them, that, for example, if you are doing a lease, that’s 5000 square feet, 60 bucks a square foot, and in this day and age are given six months of free rent and a $60 tenant improvement allowance and paying a broker, I just described you laying out ballpark about $600,000 in the first year of the lease, okay, what’s the right amount of security deposit you should be getting? If you have a single purpose entity, you know, you don’t, you know, you want to be able to get back but you know, mitigate your short term risks and be able to get back those unamortized costs in the short term. You know, we put that into all good guy guarantees. What’s happening in the city, those things are being rented semi ineffectual.
Ressa 6:21
Yeah, I would tell you outside of the city, guarantees are, are much different. There are there are much more stronger credit worthy entities than good guy clauses on leases, both from national and local tenants. Because I think one of the biggest differences in New York, the one of the reasons, the good guy thing, in my opinion started to really explode was because, in general, landlords put a lot less money into the individual tenant spaces than in other parts of the country. In other parts of the country. It was not that prevalent, because landlords have spent a lot of money turn keying spaces giving a lot of TI something you didn’t see a lot in New York City. So the guarantees were were very different. You you would see personal guarantees, you would see corporate entities guaranteeing and a lot less good guy guarantees. I digressed. I don’t want to digress and talk about good guy guarantees. I think the punch line that I was getting at is I’ve heard this line before that the document is a very landlord favorite document. I can tell you, it certainly doesn’t feel that as an unsecured creditor who is restricted from a lot of different things. I I don’t know. So I guess it depends on what what position you’re talking about. You know, there are certain things that are certainly more landlord friendly. I think it just depends on what you determine is risk for you versus what is not.
Haber 7:59
Oh, listen, I agree with you. And listen, I’m probably 5050 These days, landlords tenants, pre COVID, I would say the pendulum swung in my in my career and I was 6535 tenants over landlords. The reality is, this is the first time in nearly 40 years, you know, I started doing this in 83. But really real estate in 8586. First time in all that time that right now, generally stated not going to be a landlord. Okay, it’s just not it’s just not the same thing. Listen, there, there are going to be a lot of newly appointed members of the middle class who were once very comfortable as landlord, there’s a lot of mom and pop landlords suffering, you know, in a very big way. So, you know, I feel your pain, what regardless of what side of the table I’m on, and it’s part of, you know, part of my negotiating tactic is you need to have empathy for that person sitting on the other side of the table as you want to get as much as what’s on the plate as possible, but you need to leave some meat on the bone for the other side. And it’s, it’s it’s definitely tough times for everyone. It’s just not tough time. So tenants did so I, I hear you there, but you know, one of the things that I am seeing, you know, a trend on and I did this an awful lot. This is in retail three COVID that Yeah, and when I brought it up people used to ask me landlords, you know, this is as a Tenant Advocate, you know, have you started happy hour early today because I used to ask for the equivalent of desk sharing carve outs, which were on what you see in office space is saying that you can sublet all license up to 1/3 of your space with out the landlord’s consent without a landlord right or recapture without a landlord right to participate in profit. Now subject to certain restrictions such as in retail, you know, any exclusive there are in the building and any prohibition on certain uses. I used to ask for that in retail pre COVID. And I’m seeing now with being asked for, the reason why you would do it is, you know, if I’m a retail tenant and I set up my kitchen, for example, very efficiently, and I have extra space, you know, in that kitchen, I could sublet it out when another user and in pre COVID times, not only would I be offloading some of my rent effectively, but that particular use, like if I owned a pizza shop, for example, and I did something with a, you know, someone who made juices and shakes, you know, great, I saved some on my rent. And also, they now bring butts in seats into the restaurant, which now way more of my, you know, Peter, my homeless, you know, and my kabobs. So that’s why I would always ask for it on the tenant side. Now, it’s even more so in retail use because of what’s going on. And listen, this like faux ghost kitchens and effects popping up as a consequence of this, because now I have a restaurant, I had it closed, but I still have my product, people still want what I have. And as a consequence, if there’s a restaurant that has this excess space, you’re seeing it a lot. And I it’s come into play in some of my leases, I’m having a conference call about it over the next few days. This particular ghost kitchen wants to use part of my clients bar that has excess kitchen space. So as a consequence, you need to be thinking about that as a Tenant Advocate and landlord advocate when you’re negotiating the letter of intent, okay? Because it’s very important, and you need to be cognizant of it, you know, at the legal and business side. You know, when you’re negotiating the lease, so I’m seeing that an awful lot.
Ressa 11:41
So is the trend, the assignment and sublease flexibility? Is that the trend?
Haber 11:49
Oh, absolutely. Because I will sit there and say whether you’re a landlord or tenants pre and post COVID times, arguably the most important clause in the lease. My cause as a landlord is like six pages of healthier attempt, because it’s all about control. You know, you know, there are a lot of landlords take the mindset. And I’m not saying it’s wrong, that it’s a God given right that if anyone’s going to make money on this space, it’s going to be me as landlord, not you as tenant and the business of renting out space for profit, landlord mindset tenants in the space of running a business so they can make a profit. So if anyone’s gonna make money off of that, it should be the landlord, not the tenant. That is a mindset out there not throwing a dog, but it’s a mindset that’s out there. You know, so from both the landlord and the tenant side, that assignment and subletting clause is so important. It’s just, you know, it’s that much more important right now.
Ressa 12:46
Awesome. I think that is a excellent one. And you think that trend is here to stay?
Haber 12:52
Yes, most definitely. It should be. Okay.
Ressa 12:55
What is Trend number two?
Haber 12:57
Trend number two, as much as you’d like to think that lease restructurings, which were prevalent in the early part and the middle part of 2020?
Ressa 13:09
I don’t know anything about that.
Haber 13:11
Yes. They they have you know, and you’re sitting here, I you had made a comment on clubhouse recently. And by the way, if you don’t listen to Chris on clubhouse, he’s great. You know,
Ressa 13:22
thank you. He’s,
Haber 13:23
he is he is Elvis everywhere. Okay, doing a great job, my friend. But you would mention that weather hasn’t impacted you that much. And I was trying to get in there was at the at the Braves my hand, that was the end of your presentation. And I’m looking at it that it is in a big way, you know, because even like the ideal in markets across the country, but you know, just here, I’m in the bubble out in Long Island today. And, you know, although it’s 50% into a dining, you know, what the weather, you know, especially this has been harsh February, and late January, you know, there’s no outdoor dining, people don’t want to go sit inside that, you know, restaurants is still reeling in a very big way, you know, from the last, you know, year or so. And, and because the restaurants act still has not been passed, and supposedly it’s going to be and that’s going to benefit landlords and as it’s going to tenants, obviously, but landlords as well. You know, there’s still a lot of hurt and I’m working on three different ones right now on behalf of landlords where my clients who are mom and pops are being quite generous, notwithstanding their own pain and not withstanding they have they have their own bills to pay, you know, their own suitcase full of troubles. So I’m seeing that happening in a big way as a landlord from I have a lot of theory scripts and I don’t know if you know this, but one of them is when it comes to tenant retention or at least restructurings or lease renewals, I’m a firm believer that a good percentage of something is better than 100% of nothing that comes with vacant space. I gave that financial example before what it would cost for you to do a new deal. So, you know, the theory is the CSM. Why of course we Stills Nash and Young if you can’t be with the one you love, love the one you’re with George Benson never give up on a good thing Jerry Garcia and LeBron James that unless you work with your attendant guess what they’re gonna go Grateful Dead on you and go truck and and take Bron James take that talents, that being their tendency to another building, and they’re gonna be like staying so lonely. And you know, because I think having vacant space is like going through a drive in movie theater in a taxi cab with the with the cab driver, the meter running and you’re both not wearing masks, it makes no sense. And I’m seeing it more and more and the the, the sob stories and I’m not saying that they’re not that the Taylor was a better way of putting it tenants are saying, you know a lot of them are real. And it’s difficult, because they’re, you know, their crystal ball life landlords need to make decisions. And I’m just just seeing it. If, you know, if I was still in the ownership chair making that decision. I wouldn’t be basing it on was this tenant good pre COVID. And if they were and if the only time I heard from them was at the beginning of the month when their rent arrived in a timely fashion. And and that their story to weather the storm is somewhat real. I’ll work with them. But right now, they’re not going away. Okay, and I’m amazed at how they seem to be making a great comeback least restructurings. So that’s, you know, that’s, you know, Trend number two, the other thing that
Ressa 16:50
I would here’s a view a couple of things. I think lease restructuring is is interesting trend. I don’t think they are going away. But I do think that at some point, we’ll get to a place where the documents matter. I think one of the things I learned in the Great Recession and I learned in 2020, same lesson happened again, in times of economic distress, like massive economic distress. People just throw away the legal documents, whatever, whatever contracts they are, are less critical, because it’s fighting for survival. And the contracts don’t matter. And that’s why you have things like tenants obligated to pay rent, they might not have paid rent, yeah, they’re obligated to, but contracts go away. When there’s massive economic destruction. And you’re and you’re looking for survival. If we’re not at that point, and we get to stabilization. I do think that it’ll be very specific, because when you get to a place where landlords have a in markets where they don’t today have a functional court system, I think that you will start and we’ll see what case law dictates in certain instances. But I I think you’ll start to see that dissipate. In my opinion. I don’t know when, you know, so I could be one of those futurists who are predicting something that, of course, it will eventually happen, just and if you don’t call when then you’re always right. I don’t mean to be that person. Because I think you’re right, that we’re going to have least restructures for the foreseeable future. But as you get functional court system, and if landlords are able to work with their lenders, just as tenants try to work with their landlords, Dan, I think it will be it will be a challenge. i The piece that you mentioned, that something is better than nothing. Sometimes, yes, sometimes it depends on a lot of things sometimes, right? If you have a lender, you have a loan, and you have an obligation, and you could get something. But if that’s something still going to lead you to throw the keys back and get foreclosed on, you’re better off leaving it vacant and taking nothing and trying to take a shot on someone where you can get something that will actually help your overall goal.
Haber 19:17
Oh, well, I’m a big, I’m a big believer that and that’s what I referred to before and let’s have in their own suitcase full of troubles. Doesn’t you have debt service coverage ratios to comply with I just I just did a few tiktoks on this. And an instance that I just put out over the last few days, you know, basically, you know, sympathizing with the landlord side, you know, wearing that hat. But two of the trends that just come off of that are just they’re not that it’s a trend but, you know, I like this particular beer, it’s called Well, something, okay. And as a tenant, if you want a little something, meaning in the form of rental relief, you got to give up a little something. And whether that’s you know, agreeing to a personal guarantee, you know, you know, if you had a termination early, early, right determination giving it up, you know, you know, there’s there’s a lot of things moving to a less attractive location and one of your shopping centers for example, okay,
Ressa 20:10
I’ll give you a simple one that we were focused on pre that we were focused on, that we moved hundreds of tenants to, during the pandemic ready? Here’s a simple one, ACH rent payment. Yes, when we had rent getting sent to our offices in New York, and no one was there, couldn’t go to the office and get them. And until they established like, essential worker type things, we made a push to move to ACH rent, and we moved significant amount of hundreds of tenants to ACH rent payment. Now, that said, many of our tenants like that there are some who don’t want anyone to ACH them on anything. But we were able to move hundreds and hundreds of tenants to Ach, and we have Versa pay like a lot of landlords do. And that was, it was really helpful moving tenants to ACH. But you mentioned a little something even that that’s a little something, the person who wants to send a check is in today’s age, problematic.
Haber 21:11
Yes, I hear you. And the other trend that just plays off and it’s not my third trend is just the COVID-19 language. I’m seeing some landlords and I, I’ll sit there and say, not wisely, agreeing to too much COVID protection, okay, as opposed to eliminate it to say, this year and next year. Okay, as a relates to if there’s any problems with the building department, for example, while the tenants, the retail tenants doing their build out, or there’s some type of problem where, you know, it comes back to third, fourth, fifth wave, you know, limiting it to that I have landlords that I’m seeing and I’m represent this is on the tenant side that they’re agreeing during the the LOI negotiations, the entire 1015 year of the lease term, they’re agreeing to these protections. So the whole thing about force majeure, not including the debt now I’m in the throes of it. Yeah, essentially, the landlords are agreeing a lot of landlords are agreeing to it in effect, and that’s, you know,
Ressa 22:12
what I am seeing though, is that whatever the remedy is, is kept
Haber 22:16
what the old saying, oh, some landlords aren’t being as wise as others. You know, listen, back in the day back in the Great Recession, I won’t name the particular read, they were perfect. They were genius at it, they worked with seemingly every tenant. But they also were able to get the teeth in their documents, such as they knew the world was coming back in 2011, and 12. And they had the ability to terminate the right the lease, after say, the 12 to 18 month mark of the anniversary of the lease restructuring going away to terminate the lease was the one the market was better, they can get rid of the smaller tenant and bring in, you know, the Starbucks in the world, so to speak, and other attractive experiential tenants. The the third thing, you know,
Ressa 23:04
before we get to the third thing on the weather, I wasn’t saying the weather doesn’t matter in retail, we’ve all seen the earnings reports for someone goes, that doesn’t matter what, what I was speaking to is in that moment, in time, there was a huge storm coming. huge storm I’ve got, I still got 40 inches on the ground here. And I had not had a lot of discussions. And I have a lot of discussions with retailers and restaurants, where a lot of the discussions were more longer term. And very few of them were about the panic around that storm. That’s all I meant by that. So anyway, your third trend, what is your last trend?
Haber 23:42
Third trend is the landlords and tenants embracing, you know, this band called War from the 60s And ironically, one of the hit singles was, was a song called Why can’t we be friends? You probably know what I do. Okay. And, and the short is there’s a lot of sharing that forget the pain as the COVID. But as far as, you know, how rent is being paid. You know, initially, I saw, you know, the first half 2020 And maybe into the third quarter, you know, you were seeing and once again, I’m going to restaurants, where you know, not paying fixed rent doesn’t matter what the document states, it’s gross sales. Okay? And maybe I’ll give you a minimum I’ll give you 10% of what the fixed rent was. So you could at least pay your real estate taxes and some of your utilities landlord what I’m seeing now and then then it seemingly morphed into somewhere what saying, okay, you know what, this ain’t over and 20 I’ll play with you and 21 I’ll even play with you in 22 but 23 must be 2019 rents, and I’m still seeing that, but I’m seeing also on a lot of you know, wet used restaurant bar deals that you know, for somewhere between three and five yours, the rent is fixed at, say 20% of the fixed rent in 2019. This is our new deals. Okay. So 20% of 2019 rents, and then there’s a gross sales component between 15 to 20%. Okay. And then the, we’re talking about a 15 year deals, not necessarily just 10 comes year six, that rental is based upon an average of the fourth and fifth year. But there’s a minimum rent that must be paid at year six, and there’s a maximum rent that will be paid in year six on either tenant nor landlord gets screwed. And the bottom line is that they’re sharing with one another. I mean, I had a question because, you know, one of them was, Does this make the landlord for purposes of the liquor license a partner of 20%? Is that going to be an issue? And the answer was no, you know, from the from the SLA experts, but you know, I’m seeing more and more of these type of creative structuring the problem that I have with it. Now I’m on the owner side. Okay. Among, in addition to the uncertainty is from an underwriting standpoint, if you want to sell your building, it’s not secure and stable cash flow, if you want to, if your mortgage is coming up in the relatively speaking near future, and you need to refi not refi. You know, what are you basing it on? Okay, if it’s still in year three, or four 20% of fixed rent, plus, you know, gross sales, it’s hard time to write that deal. When I’m seeing that trend, more and more,
Ressa 26:41
I would say that I don’t consider that true partnership, because the landlord in that case, that you described, is protecting the tenant on the downside, but they don’t get to partner in the upside. It’s capped, there’s a max, you say you called it a protection for the tenant. Right? So the landlord’s the landlord’s protecting the tenant on the downside by lowering the rent. And the landlord’s kept on the upside, that’s not a partnership, that’s a trap.
Haber 27:14
Well, wait a second, if the year six rent in my example, is, at worst, at worst, 2019 rental, and the landlord can live with it and then not putting a lot into the deal. So they don’t have to quote unquote skin in the game like the tenant does. Okay, then it’s not such a trap, but I hear you, you really, you need to look at a lot of the ramifications that
Ressa 27:40
I would just I would just say, I’m not saying it’s a bad or good deal. What I’m saying is, I like the word partner, when it’s a true partnership. To me, if one party is protected in one side, and the other party is capped on the other. To me, that’s not partnership partnership would be okay. We’re gonna protect you on the downside, but I’m along for the ride. That’s why I’m lowering the red. But I’m along for the ride on the upside,
Haber 28:08
Oh, I did listen, if you are pre COVID times as a landlord, 75 80%, levered on your properties, you can agree to that deal. Okay? If you’re 4050 or less percent, you know, on leverage, then you can get you have that flexibility, so to speak.
Ressa 28:25
It forget about the flexibility to me, it’s just the concept of being a partner. Like when people use that word, I love the word want to be partners. But to me again, I don’t know that in what they really want is protection on the downside. Oh, yeah, not to partner on the they want to. And I think that’s one of the pieces. Here’s the other piece of that in scenario where it’s not capped. And I talked about this a lot. If you’re a growth retailer, or restaurant, you’re going to open up a lot of locations, you’re going to continually grow. You see some of these public retailers, where they comp up 789 10% year over year, they’re comping up quarter over quarter, the worst thing they can do in the world is percentage, right? Because every dollar they sell is they’re growing, they’re giving more to the other the landlord, what they need to do is fix their rent and lock it in for long term. That’s what national retailers do as they grow who are smart, when they’re when you have huge growth potential you want. You want as much rent fixed costs fixed. And when you’re uncertain and you have a variable lumpy income stream, like some restaurants do, you would like to pay variable cost structure. And I think that I think that’s the thing that we say often you’re gonna see rental agreements, change across the board, I think depends on the use. growth companies are gonna want to lock it in. Because they’re they view that they don’t want to give away the upside to the point that I said, companies that are or mature or, or concerned and protecting downside, they’re gonna want, you know some sort of protections. Every corporate office in America like American Express and Google, they’ve all got targets where they want occupancy, their occupancy costs to be they want their occupancy costs to be a percentage of their total revenues. But that doesn’t trickle down into their office location on Fifth Avenue. And they don’t pay a percentage rent based on whatever they want that allocation of those services should be right. So I think that at the end of the day, we’re going to see a lot of change in structure. In in things, I think tenants in certain regards are going to fight for variable cost structure. I’m interested to see how it works. One of the things that I would tell you, the more complicated we make documents, the harder it is, and one of the things that you know, at least on the structure you describe there, it’s gets caught it gets drafted gets complicated, like 10 There’s a lot of tenants who wouldn’t even know how much they owe the landlord.
Haber 31:09
I burned brain cells drafting that stuff. You know, it’s you’re really gotta be careful. There’s no question about it. It wasn’t you know, not every deal was for everyone. Was it like any anyone in real estate using a line from Forrest Gump? We’re all like a box of chocolates. You never know what you get inside. Okay, we’re all different the way we look at it. And everyone has different pressure points. And everyone has the you know, the different constraints they bring to the table. So you know, I hear it is just,
Ressa 31:36
we’re all box of chocolates. Just remember
Haber 31:38
Oh, a box of joy. Mama new
Ressa 31:42
mama new. So here’s what I’ve gotten to so far. trend. The first trend was, well, we had the least restructuring. That was two The first trend was assignment. sublease. Flexibility. And the third was some that changes in rental structures. Is that right? Yes. Awesome.
Haber 32:02
And you just came up with a fourth, by the way, having the equivalent of a convertible note, okay, where you can convert your debt to equity. Okay, like after the best aside, just now tenants are going to come at you with that. Okay, well, landlords will have a right to convert it at a certain point in place in time. So you don’t have that trap, as you put it started a trend, my friend? Well, we did collectively.
Ressa 32:27
That’s what the private equity firm did with AMC debt, they converted the debt to equity and sold the stock they had a strike price in like the $18. And they, they had paid her they had paid her that was pretty, pretty amazing. But for
Haber 32:43
that, you know, a trend that I don’t know if it’s going to happen, but it wouldn’t shock me in urban areas is that went with the loosing of making like the city streets, you know, not that it’s a public mall for outdoor dining. But the fact that now our landlord’s going to be trying to, you know, take on what’s an N by Clapton gotta keep on growing, are they going to expand the footprint of what the rentable square footage is to use the sidewalks as well, where previous would rent because now the permits are relaxed on that you couldn’t, you know, have outdoor dining in most locations. One thing about Columbus Avenue, you say on the Upper West Side, but now our landlords going to try and get more rent for that.
Ressa 33:25
Interesting, we will say, Okay, the next part of our show, we are running tight on time, you have a story about a store that opened?
Haber 33:34
Yeah, I have a few I have like three different deals that was signed, pre COVID. And all are about to or have opened, and it was it was a partnership of great landlord, patient and relentless tenant, to say a relentless broker involved would be redundant, but brokers who really had game, okay to make it happen and great architects, you know, and great contractors. So a client of mine, you know, we had a deal, dry use. I won’t say what the use was they were in a high profile location in Soho with a high profile retailer who they they had sublet out the back portion of their space, and we got this high end retail of boredom out of their sublease, they moved to another location downtown, a better location, but they really needed to be uptown and let’s just say the Madison Avenue, fifth area, Fifth Avenue, you know, high rent district, so to speak, and we signed the lease, you know, the end of 20 of 2019, the beginning of 2020. They had limited free rent and the short version is because the DOB was closed down because You know, I have problems with getting plans approved and and getting bids done. The bottom line is that free rent was expiring the landlord work with them in a big way, the broker on the deal. I thought it was incredible. Kudos, Amy. And you know, and the short version is they just opened up two weeks ago.
Ressa 35:26
And who was this? Who opened up?
Haber 35:29
Makita? Am I MyK? Ita, they’re, you know, they’re actually an entity out of Germany that has, you know, I don’t know how many locations globally, but only I think four or five here in the US. Okay, high high end eyewear. Okay, and it was it was just, you know, so getting back to you know, how you had an issue with my wife and co authors before, this was a true partnership, the landlord really worked with the tenant, okay, in a big way, because they saw why it was a good use for the property and they saw that they were going to make it happen. You know, you have to give the comfort of your attendant to give the warm and fuzzies at every level to the landlord that it’s okay, if I’m going to work with you, you’re going to work with me. Okay. And that will get to share the pain, it’s not going to be proportionate sharing of the pain, you know, and the fact that they opened up, you know, they work together. And listen, they made that dream of leasing realities, what it came down to was wonderful. Get them over clemco video talking about?
Ressa 36:39
Excellent. Well, if we unpack that a little bit, you had a lease, there was a tenant in a space, they were going to sublease that. And that was Makita. They were subleasing that to somebody else. And they moved their location. And that
Haber 36:52
was that was something that happened a little while that sublease. But it’s a story of just having good, good representation on your side a great team, because they were able to parlay being bought out of a sublease to not even not just the location downtown in a better location downtown. But ultimately, because the brand was able to expand, they got traction, they were able to, you know, satisfy the dream of also having a location uptown. And when they signed this lease, you know, just you know, on the cusp of COVID, you know, they you know, they were in a bad position once COVID started, as they saw, there’s not a shot in hell, we’re opening up during the free rent period, for getting out even having the place built out, you know, they weren’t even putting hammer to nail and the free rent period expired. Okay. And, you know, the short version is because, you know, they were able to, you know, with the aid of their architect and expedite is in the landlord working with them, they were able to, you know, make this deal happen, okay, and the broker doing a great job along the way, not disappearing, not disappearing, excellent, and being integral to, you know, to working out whatever needed to be worked out during the process.
Ressa 38:05
Fantastic. I want to move us to the final part of the show retail wisdom. Are you ready?
Haber 38:11
Retail wisdom.
Ressa 38:12
Okay. All right. Question one lie. What extinct retailer Do you wish would come back from the dead?
Haber 38:19
Not Steven berries, other than the fact that I liked the fact that their hats were very cheap and their their hardware was very cheap. I would like to say crazy Eddie, because of the commercial. I don’t know if you remember craze? I do. You know what, what was the? What’s the story? Jarrett? Just any of those entities? You know what, I gotta tell you something you have any somewhat stumped there
Ressa 38:41
can’t be stuff. All right, we’ll come back to the question to what is the last item you purchased over $20 in a store?
Haber 38:51
You know, it’s so funny because, and obviously not talking about a grocery store. It would have to be a target just because yeah, target is for everybody. What you buy. We were in the you know, I bought a DVD for one of my my fourth son, my fourth son has autism does that world does well, but what he knows about the movie industry is crazy. But but we bought a DVD from he still likes the hot hardcopy as well as the screaming it online.
Ressa 39:25
Incredible. Last question, and we’ll come back to the first one. If you and I were shopping at Target, and I lost you where I would I find you Well,
Haber 39:37
I already gave it that I already gave it away you know with that you would either find me in one of two ways either, you know, in the in the frame section. Frame. Yes, because this target always had great pre made frames that I used to not have a memorabilia company but someone you know a lot of people throw We did we used to, we had amassed a collection of sports memorabilia and spent well over a decade donating it to children’s charities. And we used to buy our frames there. Okay, that the target and Michael’s the other is they do have a although small they do have a Lego section. Okay. And so being that we both like to build things my, my thoughts son has we basically have a museum in our basement of Legos. So you would find me there.
Ressa 40:33
That is great. A museum of Legos. I’d love to see it. That’s great. You got to take a video.
Haber 40:39
Yeah, yeah, no, it’s yeah, if you ever driving out east, it’s worth stopping by for a cocktail. Okay. You know, we’ll do when that time comes, for sure.
Ressa 40:51
Back to the first question, what extinct retailer would you wish would come back from the dead?
Haber 40:55
You know, crazy as this may sound, the winds,
Ressa 40:58
the winds, nobody beats the winds, I love the West,
Haber 41:01
you know what, just just because, you know, it’s, you know, I’m, I’m a music guy, I basically, you know, I went easy today using, you know, references to music, but that’s how I teach, using, you know, rock and roll hip hop, pop cultures, you know, sports analogies, but just being able to look at a DVD to look at the artwork on a album cover, you know, a broken record, so to speak a record, you know, is you know, that that was that was part of the art. Okay, it was part of the experience, so to speak. Yeah, I miss anything that has to do anything with with an experience. Okay. Right now, so it’s, you know, it’s, I had to actually, you know, think on my feet that but, you know, I have an expression it’s all about the Jimmy as in Ji MI, Jimi Hendrix. Remember, the name of his band was Jimi Hendrix and the experience. Yep. And it’s something that we’re all missing, unfortunately. So, go into the wisdoms, any of those record shops don’t some of the places in the village in the city of Lincoln, Bob, it was cold with Jnr records. Okay. Those places were great.
Ressa 42:12
Love it. Well, listen, Larry, this has been awesome. I appreciate you coming on. Thank you for listening to retail retold. If you want to share a story about a retail real estate deal that you were a part of on our show. Please reach out to us at retail retold at DLC mgmt.com This show highlights the stories behind the deals from all perspectives. So it doesn’t matter if you are a retailer, broker, entrepreneur, architect or an attorney. Also, don’t forget to subscribe to retail retold so you don’t miss out on next Thursday’s episode