Archive for June, 2009

Riding The Ups And Downs Of The Technology Roller Coaster. Journal of Property Management

Riding The Ups And Downs Of The Technology Roller Coaster

Todd Zeldin, President
ACG Professionals, Inc.

During the late ’90s, the technology industry experienced the ride of its life. For a multitude of dot.coms, maximum thrills and chills came in the form of easy venture capital, quick profits, teenage millionaires and laid back working environments. But what goes up must come down. Beginning in late 2000 many of these thrill seekers found themselves careening out of control, their profits and companies heading for a deep descent. Despite their willingness to hang on tight a large number of these technology start-ups plunged into bankruptcy as they could only watch the floor flying out from under them.

What happened? How did the boom turn into a bust so quickly and completely? While hindsight is always 20/20 vision, the fact is that there were a number of clear trends that contributed both to the periods of expansion and decline.

Granting Rent Relief

There have been several stories written about tenants requesting rent relief from landlords. After speaking with at least a dozen firms at last month’s ICSC, I have come to the conclusion despite articles reflecting the contrary, rent relief is being granted on a case-by-case basis. Some landlords are requiring an interim step that screens out tenants requesting rent reductions “just because” via a long written survey that must be completed before any rent relief is considered. Other landlords are reviewing store sales and formulaically determining what if any rent relief should be granted. The bottom line is that tenants should try to get as much rent relief as possible just as landlords should try to charge as much as possible depending on the then market conditions. Seasoned asset managers will strike a delicate balance between granting rent relief and keeping tenants happy in the short run with maximizing asset value in the long-run. If you have specific rent relief stories you would like to share, please do so.