Internet retailers and other merchants new to the physical space tend to get bewildered by the length of the modern lease process. In a session at ICSC’s New York Deal Making last December, Kyle Ashley, director of retail innovation for eyewear vendor Warby Parker, urged landlords to make the process quicker, easier and more transparent. “Why does it take five months to negotiate a lease?” Ashley asked.
One of the surest ways to speed the process is to use in-house leasing personnel, says Gerald Crump, a Weingarten Realty senior vice president who oversees the central region. “This gives us the ability to make quick decisions and coordinate immediately with our legal group, all of which takes time off the lease-negotiation process.”
Weingarten has three lease-streamlining programs, including one specifically for mom-and-pops, in which the tenant, typically not working through a lawyer, can use a simplified form. These so-called LD (leasing department) leases are free of much of the standard legalese and require only three to five days to complete, unless site-specific issues arise, Crump says. Holiday leases and six-month temporary leases can usually be completed in one day, he notes.
Weingarten’s second program, generally for regional tenants but sometimes for mom-and-pops too, involves a slightly more complex short form and has a median 30-day turnaround time. This includes just one or two rounds of comments from each party and is overseen by paralegals on the Weingarten side, says Crump. “It’s pared down, so it streamlines the process,” he said.
The third program is geared to large national and regional tenants and usually includes prenegotiated terms already written into the tenant leases at Weingarten’s other centers. “That way, we’re not rehashing terms we’ve agreed on, just negotiating site specifics,” Crump said. The median lease-completion time for this program is 35 days, with large grocery anchor deals typically taking about 50 days — still well short of the industry average, Crump says. To shepherd deals along, the firm also helps many tenants walk through their permitting and planning phases.
To keep staff on the same page and expedite lease completion, Kimco Realty Corp. has made the lease life cycle both electronic and transparent, including all approvals. “That greatly reduces any bottlenecks and points of friction when moving a deal through the system,” said Kimco COO David Jamieson. “Tasks for deals are visible to the entire team, which helps drive accountability.” Kimco also offers incentives aligned with deal quality and production to staff, “so there’s a motivation to get deals done expeditiously without jeopardizing the quality of the deal and long-term impact.”
By Steve McLinden
Contributor, Shopping Centers Today