We are a few months into COVID-19, the global pandemic that has shut down economies around the world, grounded most airlines and put a general hold on just about everything. It has been a scary time for business owners, retailers and landlords with little exceptions. Even those with tenants that were previously deemed “strong” or “anchor tenants” are struggling:
- The Cheesecake Factory told landlords across the country it couldn’t pay April 1 rent.
- Gap Inc. says it’s not required to pay rent when governments or public-health authorities order store closures.
- And the big one, over 50% of department stores in malls are predicted to close by 2021 (via CNBC)
But what about those retailers and tenants that are home to the “The Real Estate Trifecta”?
What is the Real Estate Trifecta?
While most retail operations are closed, pharmacies, liquor stores and grocery stores are generally doing fine, if not exceptionally well.
During a devastating global pandemic landlords around the world can take solace in their locations that lease to these three industries.
What does the future hold?
While it’s unclear what the solution will be, one company – Brookfield Asset Management Inc. – has announced a plan, called the Retail Revitalization Program, to provide funds to cash-strapped retailers in exchange for a stake in the business.