A&G Real Estate Partners delivered $1.68 billion in occupancy-cost reductions for 51 retailers, restaurants, educational users, office tenants and fitness and entertainment operators in the first nine months of 2020.
With the vast majority of work completed since March 1, the portfolio-optimization specialists at A&G have worked on a total of 13,653 leases. They negotiated lower rents on 9,550 of those and secured terminations on 950, amounting to a 77% success rate.
“The unprecedented volume is a bellwether for the sweeping changes occurring across nearly all sectors of real estate,” Andy Graiser, co-president of A&G, said.
The firm’s year-to-date success rate on lease negotiations was above a 50% ratio.
“The pandemic tested both our core teams as well as our consultants. They have all worked seven days a week since the virus hit to catalyze real estate strategies for our clients, whether right-sizing their operations or reorganizing under Chapter 11,” Graiser said. “It’s an ongoing task that has far exceeded anything we could have imagined.”
A&G’s clients over the past nine months include Chico’s, Cinépolis, Ascena Retail Group, Rue 21, Tuesday Morning, GNC, Guitar Center, DSW, Francesca’s, Tailored Brands, NPC International, Pier 1 Imports, Stage Stores, Sur La Table, Cadence Education and Sequential Brands.
The latest results do not include other companies A&G provided advisory services and strategic support to over the past nine months.
“Every day we’re providing guidance and advice on real estate to hedge funds, private equity firms, lenders, investment bankers and term lenders,” Graiser said. “They are turning to us because of our real-time knowledge of what’s transpiring in an extremely volatile marketplace as well as our strategic and creative leadership, credibility with landlords and successful 30-year track record.”
To deal with the unprecedented volume of leases, A&G created a financial reporting and property analysis group.
“We hired experts in integrating data from site-selection and demographics services, proprietary databases, lease documentation and other sources,” Emilio Amendola, co-president of A&G, said. “The ability to quickly access more and better information on behalf of our clients has been a game-changer.”
“A number of our clients who had planned on a so-called ‘V’-shaped recovery are now turning to us to start a phase two project,” Graiser said. “We have helped them work through their immediate liquidity issues. Now we are leveraging our greater visibility into the impact on business results to make better projections and reset rents to align occupancy costs to what is going to be the ‘new normal’ for many businesses.”