Capstone Keeps Healthy Retail Leasing Retail in 2020

Capstone Advisors has managed to maintain strong leasing activity in its retail portfolio this year, despite business closures and stay-at-home restrictions during the pandemic. The firm both retained and renewed existing tenants and signed new leases with retailers that have experienced healthy business performance.

“We continued to be responsive, creative, adaptable and entrepreneurial in our approach to new opportunities and changing market dynamics. We understand the success of our tenants drives the success of our properties, so we invest in resources and provide guidance to help each tenant grow their business even in these trying times,” Alex Zikakis, president and founder at Capstone Advisors, tells GlobeSt.com.

Zikakis has outlined a number of factors that helped to drive leasing activity this year, starting by maintaining properties in lease-ready condition and implementing safety measures to keep tenants and customers safe. “Featuring hand sanitizing stations, high-performance filters in all HVAC systems, and increased property cleaning, especially in high-touch locations at all of Capstone Advisors’ properties. For our retail centers, we installed parking for curbside pickup, increased signage promoting social distancing and safety messages, and added new outdoor seating and dining areas in the common areas and parking lots,” he says. “We have also increased our focus on security with additional nightly patrols and manned camera monitoring to make sure our properties remain clean, safe and inviting.”

During the pandemic, driving leasing activity also required a strong online presence and virtual touring capabilities. Capstone mobilized its brokerage relationships to market properties, and made sure that all marketing materials were widely available. “It is important that our leasing opportunities are easy to find, and our listing information is informative and accurate,” says Zikakis. “We have current as-built drawings of our vacant spaces, which outline dimensions, utility placement and sizing and other key information pertaining to the specific suite. These as-built drawings allow tenants and their agents to quickly understand the physical attributes of the space. They also allow us to quickly and efficiently create space plans to test fit the tenants’ space needs.”

On the tenant side, the firm was flexible on lease terms to reflect the new market conditions. “Designing creative lease structures for new tenants and giving tenants in impacted businesses lower starting rental rates to get through another year of COVID-induced difficulties before stepping the rent back up to a normal, market rent. For existing tenants whose businesses are affected by COVID, we have been creative in deferring past rents as needed, and then extending lease terms to assist in structuring repayment over time in a ‘blend and extend’ strategy,” says Zikakis.

This evolution didn’t come immediately. Like all owners, Capstone navigated decreased rent collections and demand early in the pandemic. “Our retail portfolio rent collection plummeted in the first few months of the pandemic as tenants were trying to understand how their businesses would be affected,’ says Zikakis. “We are very accommodating to tenants negatively impacted, giving them time and support to pivot their business model as needed. An overwhelming number of our tenants have successfully modified their businesses and are doing quite well.”