Conor Flynn spends a lot of time talking to retailers about their leases these days. “We’re basically renegotiating 7,000 leases,” the Kimco Realty CEO said during an ICSC Connect Virtual Series episode: A Conversation with Conor Flynn.
All of the company’s 400 centers have remained open through COVID-19, but just over 50 percent of the tenants have been operating. Many of those are supermarkets, home-improvement stores and pharmacies.
The company has a Zoom meeting at the beginning and end of each day to stay on top of developments at its 400 properties nationwide. Still, Kimco has found that a decentralized management model helps deal with the range of reopening timelines in different areas of the country. “Our regional framework creates the action plan that keeps us ahead of the curve,” he said. “The team on the ground shines a light on where we need to be focused. Each municipality has different rules.”
Consumers also affect reopening timelines. “Some people are going to come back into the store, some people are going to do curbside pickup and some people are going to ship it to home,” Flynn said. “New Yorkers are responding differently than people in Texas. Areas that aren’t as impacted aren’t taking it as seriously. Certain parts will come back quickly because they don’t have that fear.”
Those shoppers who are coming to Kimco’s centers are not browsing, Flynn said. They’re spending more money and buying more items. “People who are going out to shop are going out for a reason.”
The government’s designation of some retailers as essential and nonessential has created an uneven playing field, Flynn said. “The essential ones have an unfair advantage. There have been huge market shifts.” Grocery, pharmacies and big-box retailers are seeing all-time-high volumes because they have no competition, he said. And sometimes the rules can seem unfair, he pointed out. Some so-called essential retailers are selling home goods items while home goods-focused retailers must stay closed, for example. “The pain of being non-essential is immense.”
Kimco is taking steps to help its small-business tenants survive the lockdown, but more government help is needed, Flynn said, as many small chains don’t have the balance sheets to survive. He expects 50 percent of the company’s tenants to access federal funds through the Paycheck Protection Program, though that depends on lawmakers cooperating and passing legislation to provide for more relief.
ICSC is encouraging Congress to set up a COVID-19 Recovery Fund. Members can reach out to their representatives here.
The full ICSC Connect Virtual Series episode is available here (Chrome works best).
By Brannon Boswell