Restaurants, especially small shops with single proprietors, are among those businesses hit very hard by the coronavirus closings.
Landlords and other property managers who want to preserve their income and business relationships face some hard choices, including options such as deferring or cutting the rent while at the same time perhaps extending the lease to compensate on the back end.
That was just one option shared when Millionacres kicked around for some different takes on the issue in search of possible guidance or inspiration for real estate investors tasked with such decisions.
Here are a few more perspectives and ideas:
Civility and lenience, if possible
"You can help by being lenient and civil," says Chris Gold of Chris Buys Homes in St. Louis, a real estate investment company.
"These are extremely difficult times for everyone. Property managers and landlords may be suffering from loss, but so are the restaurants who rent from you," Gold says.
Based on his experience from all sides of those relationships, Gold offers this advice: "Try to step into their shoes and figure out what exactly they have been going through before jumping to a harsh conclusion or laying out demands. Every situation will be different, but I hope property managers and landlords will take a step back, analyze the situation, and be reasonable with their tenant."
Perhaps consider waiving rent temporarily, reducing it, or deferring payments. "If you can take any of these steps," Gold says, "please consider doing it for the betterment of your property, your tenant, and your professional reputation."
Instant gratification on Instagram
As a Realtor and a resident, Jason Rowland wants to see his neighborhood and community succeed, including the restaurants that contribute so much to the character and charm of a place.
When COVID-19 left restaurants and other small retailers in a world of hurt, Rowland wanted to step up to do what he could in his Chicagoland market.
So the Rowland Group began giving away gift cards each week -- either $50 to two people or $100 to one -- to support local restaurants and grocers.
It's a good way to market the company, of course, and local restaurants and taverns certainly can play a role in deciding where to buy a home. And, Rowland says, "It's a way to support local business while also giving families potentially pressed for funds a way to get a good meal."
The promotion will continue as long as necessary, Rowland says, and is conducted via Instagram. The gift cards are bought directly from the small businesses, not via a delivery service or any other third party, to ensure as much help as possible goes to the proprietors.
Delivering the goods
Property managers of multi-unit buildings could partner with local restaurants and have them be the exclusive delivery options for their buildings.
"This provides a new multifamily amenity for building residents and allows buildings to choose locally-owned restaurants in their neighborhood to power the building's food menu and drive revenue for those restaurants through delivery orders," says 2ndKitchen Residential.
The Chicago-based firm said in an email to Millionacres that it works in multiple markets to forge these types of partnerships at no cost to restaurants or apartment complexes.
The same approach may well work for reopening office buildings, especially since many will be sharply restricting cooking and other common-area use.
Share the space, create some wealth
"It's always terrible to see local businesses close due to the current climate," says Graham Beck, whose Long Beach, New York, company DropDesk provides an app and other services needed to create coworking spaces in multiple venues, including restaurants.
"We can help struggling restaurant owners by converting their unused space into coworking spaces, with social distancing and other procedures to keep the community safe," Beck says. "This allows restaurants to leverage their current space and monetize it in new ways."
Share the space, but not at the same time
National Real Estate Investor (NREI) just posted an interesting slideshow with more ideas about how to help restaurant tenants survive reopening. They include bridge loans for well-run restaurants with an established track record, helping to get out the word about safety measures in place, and working with the restaurants to deal with any red tape involved with creating outdoor areas.
That piece also includes some granular operational advice that property managers and landlords can offer restaurant operators. One example: Retail centers with multiple restaurant tenants can encourage coordinating hours to avoid them all being open at the same time.
"That can help limit sales cannibalization and ensure that all of the tenants benefit from the center's shopper traffic," the NREI article says.
After all, a rising tide lifts all boats, even if they can't all be rising at the same time.
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