I found this comment--in response to our "Retail Landlords Grant Temporary Deferments, Come Up with Barter System to Set Off Rent Declines" analysis to be very interesting. I have put it here to see if there are additional thoughts on this topic.
Only a greedy, stupid lender would force a Landlord to hold rents, when a Landlord deems it necessary to help a tenant, and the Landlord that agrees to such language in a lending document must be weak to begin with. Who knows the business of shopping centers better than the people who have to lease them? An accountant only knows how to add up the numbers, and has no clue what needs to be done to keep a shopping center full with the right kind of tenant mix. Sure there's a market out there if you want your center to have H & R Block on the mall, or some Temp operating because Gap couldn't catch a break from the Landlord, but what is better for the mall is to have that Gap store operating. I'm not promoting a total collapse of a rent roll, but reasonable treatment should be the norm, and not something that anyone needs to boast about or hide. That is how this industry became an industry, and that is the way it will get back to profitability.
The whole industry went haywire 10 - 15 years ago when the accountants and the SEC took the business from the real estate/leasing teams, who were the entrepreneurs that made centers work in the first place. The "Trend" began when companies going "Public" had to figure out how to sell their companies for more than they were actually worth, which is pretty close to the definition of Greed. All this to guarantee that every dime of rent that was promised was paid. Now all you have is REITS and public companies that do business based on getting more rent every time they have a chance, which leads to market values (rent costs) that are not realistic. A good Leasing rep knows when a tenant needs help, and should always be free to make something work for, or with, the landlord and the tenant's long term best interest in mind. If the tenant is strong enough to make it in the mall in the first place, then some day this tenant will return the favor when the LL needs it.
Sometimes trends lead us in the wrong direction, and the REITs, and SEC, have all fallen into this trap of hardball negotiations. When the trend finally reverses itself, landlords who bend a little, without breaking, will come out on top. Those who succumb to the greed, and are blind to those needing help, will be gone. Likewise, lenders who break a tenant or a landlord to keep their balance sheet clean should be hung out to dry, which is what is happening to them right now also.