Happy December everyone, and welcome to another episode of Saturday with Howard Kline and CRE Radio & TV. It’s Episode 9 to be exact. We’ve taken some time off, so in some ways it feels like Season 2, Episode 1. In today’s installment, Howard engages in a lively discussion with M. Rosie Rees and Ruth Schoenmeyer, who are both attorneys with the law firm, Pircher, Nichols & Meeks. The topic is whether internet sales should be included in the percentage rent as provided for in some retail leases.
Percentage rent has been an interesting issue in retail leases. Landlord’s sometime see the clause as a way of gaining additional rent if a store is extraordinarily successful. For them, it “right-sizes” the rent to keep it a consistent percentage of the store’s volume. This is also beneficial to the landlord in a environment in which there is inflation, without the need for a Consumer Price Index (CPI) adjustment clause in the lease. From a tenant’s perspective, percentage rent can be used as a negotiating tool to keep the negotiated rent and rent increases at a level where they feel they can be profitable.
The discussion of what is included and excluded in percentage rent clauses has always been a complex one, and national and regional tenants usually have the upper hand, except perhaps with the largest mall developers. Now, with internet sales becoming an increasingly important part of many retailers’ business, this negotiation has taken on an even greater complexity, with Tenants wanting to exclude internet sales and Landlord’s wanting them included. It seems as if it is a problem only King Solomon could solve, and there are interesting arguments to be made on both sides of the issue. Watch as this trio hashes out some of the complexities.
In Episode 8 of Saturday with Howard Kline and CRE Radio & TV, Howard talks with Neel Naicker, CEO of AMP Technologies about the impact of sensor technology on workers and the built environment. Tenant spaces will become more interactive, energy efficient, and comfortable. Will smart buildings allow Landlords to charge more or save costs, or both? Will Tenants demand sensors to gauge how healthy an environment Landlords are providing? Will Class A buildings lead the way? Will Landlords of existing buildings be willing to invest in these technologies? The cost of sensors is low, and wireless technology will make it possible to deploy them cheaply. Howard and Neel gives us a glimpse into the future of commercial space. O brave new world!
How do you feel about your building knowing more and more about you?
This week Howard is more auteur than interviewer. He introduces his guests Kristin Blount, Executive Vice President of Colliers International in Boston, and Jane Snoddy Smith, head of the Real Estate Group at Norton Rose Fulbright in Austin, but the episode proceeds as a conversation, rather than an interview. Howard makes a Hitchcockian appearance, but the story centers around how Jane and Kristin first met, how they bonded through working together through both personal adversity and leading the CREW Network in successive years through The Great Recession. The conversations ends on a note of triumph as they discuss the consolidation of the different real estate industry associations for women in New York, culminating in the forthcoming CREW Network Marketplace and Convention coming to New York City from October 19-22.
Episode 6 of Saturday with Howard Kline and CRE Radio & TV pairs our host with renowned commercial real estate coach, Rod Santomassimo, of The Massimo Group. Their topic is “Will the Presidential Election Have an Affect on Commercial Real Estate?” The interview was conducted in May at ICSC RECon16. The dust was beginning to settle on the primaries, but it was well before the Republican and Democratic Conventions in July. Nevertheless, it was already quite clear that Donald Drumpf and Hillary Clinton would be representing their respective parties.
Beneath the light-hearted banter, they discuss some serious issues that will effect the real estate community, including whether either candidate would seek to change the 1031 tax exchange, what would be the impact of an increase in capital gains tax rates, would either candidate mess with the mortgage interest rate deduction, and who would be the better President for the middle class?
Howard further engages his audience by introducing an interactive polling feature in this episode. So, watch, learn, and vote early and often!
How do you feel about these issues? Sound off in the comments!
To see previous episodes of Saturday with Howard Kline and CRE Radio & TV, click HERE.
Today we have a double feature! At ICSC RECon16, CRE Radio & TV host Howard Kline seized the opportunity to interview Garrick Brown, Vice President of Retail Research for the Americas at Cushman & Wakefield. In the first installment of the interview, Garrick discusses the impact e commerce on bricks and mortar stores, omni-channel retailing and the resulting retail right sizing, some of it in response to Wall Street pressures, some in response to escalating rents. Watch, learn, think, and respond in the comments!