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GlobeSt Up Close
President and CEO Ivan Friedman gets Up Close with GlobeSt and talks about the state of retail leases.
Dec 19, 2008 GlobeSt Ian Ritter
When retailers have problems, firms like New York City-based RCS Real Estate Advisors usually get a lot of business. The firm, which markets closed chains' leases, got the contract to market Steve & Barry's 173 units earlier this year when that sportswear chain went into Chapter 11. It has also worked with Tweeter and BTWW Retail in helping those companies market their stores. But Ivan Friedman, the firm's CEO, isn't sounding too bullish on retail right now. It seems as though when everyone is having tough times, it's not good for anybody.
GlobeSt.com: Are the liquidations in the industry actually good for your business?
Friedman: I use an expression: 'It's so bad that it's too bad.' It's not good for anybody. Bankruptcies now are causing all companies to liquidate. Very few companies reorganize. That's not good for the company, and that's not good for selling leases because nobody is buying leases, or at least very few people are buying leases. Much of our business is renegotiating leases. In bankruptcies past, we had a year or so to renegotiate the lease because the landlord thought that they would have a tenant if they reduced the rent. Now there's not going to be a tenant, so there's no rent relief to be gotten in bankruptcy cases. It's not good for me because we derive a lot of fees from rent relief. Bankruptcies are so short that it's not good for the bankruptcy attorneys because they bill by the hour. Need I go on? It's terrible.