Tuesday, July 1, 2008

Another retail chain in trouble? A line on Steve & Barry's and some thoughts on defensive leasing

Boy, they weren't kidding about retail woes. Now I am reading that Steve & Barry's, a cheap chic chain, is talking to Weil Gotschal and thinking about closing 1/3 of its stores as it decides on its future.

I found the comment about defensive leasing from a Greenberg Traurig lawyer interesting. From a landlord's perspective I guess that means (for instance) watching out in a down market for big TI allowances and shelling out major money on a lease that could go south. Boy, have I seen that.

Defensive leasing also exists for tenants in an up market; this is a term I am more familiar with. In other words, tenants will sometimes take more space than needed or commit to so-called "must-take" options to add on space in the future in order to lock in possible expansion needs. This is, of course, seen more often in office leases.