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of retail space in New Jersey,
noted that large, outdated malls
that were struggling before the pandemic are still in dire straits. Freestanding shopping centers with supermarkets, health care services and tenants that, for now, are resistant to e-commerce are “seeing the light at the end of the tunnel,” he said, and those that have adapted their business “are out there trying to do deals.”
As of early April, Jacobs’ firm had executed or was close to executing five new leases in recent weeks, with tenants including a national fitness chain and a regional salon operator. That follows a year in which he and other landlords
took steps to help tenants stay afloat during the pandemic, largely through rent deferrals and other agreements, while others relied
on government resources such as federal loans under the Paycheck Protection Program.
“I’m doing new deals now, whereas last year all I was doing was trying to keep alive,” said Jacobs, who also serves as the New Jersey state government relations chair for the International Council of Shopping Centers.
A recent survey of Levin Management Corp. tenants found that, while most reported a decline in sales from 2019 to 2020, more than two-thirds of respondents expressed optimism for store performance in 2021. That closely reflected the trailing nine-year average for the poll, Harding said, citing the moods of tenants that are encouraged by the vaccine rollout, the further lifting of COVID-related restrictions and other tailwinds.
The longtime LMC executive also pointed to new activity by users including off-price retailers and other “strong tenants that see an opportunity to get good real estate at good deals now, with a positive look to the not-too-far-distant future when things may be back to normal, in a sense.” Those businesses are “out there pretty aggressively looking for space,” as are grocery chains that hope to modernize
their space in line with consumer demands.
Retail landlords still face questions, including looming bankruptcies
by tenants whose weakness was exacerbated by COVID-19. Dan
Stolz, a Basking Ridge-based attorney with
rent — the state’s moratorium on commercial evictions and other restrictions made it all but impossible to do.
“All you’re doing is pushing the ball down the road,” said Stolz, who chairs Genova Burns’ bankruptcy, reorganization and creditors’ rights practice. “Eventually, there’s going to be a reckoning and New Jersey, being as densely populated as we are and being where we were in terms of the damage that happened at the beginning of the cycle, is probably going to be at the lead of
the crisis when it comes.”
He noted that business bankruptcy filings were lower to start the year, but still believes that “the water is rising behind the dam and at some point the dam is going to break.”
Other industry experts also point to additional hardship. In a February conference call, a top executive with the advisory firm A&G Real Estate Partners said U.S. retailers will continue to file for bankruptcy and close stores in 2021, due in part to their need to repay deferred rent from 2020.
Dan Stolz
Genova Burns LLC, noted that many landlords forgave rent and took other short-term measures in 2020 to help keep their
tenants in place and protect their own properties. For those that
did want to get their space back — often because tenants simply shut their doors or stopped paying
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