The Retail Property Sector Is Shedding Its Old Skin

Real Estate attorney Sean Willet was quoted in a Law360 article analyzing retail market trends amid big-box store bankruptcies and tight inventory. A slate of high-profile Chapter 11 filings by chains such as JoAnn Fabrics and Party City has left some questioning the health of the retail industry, but data from recent studies show the U.S. shopping center market has weathered the storm, with leasing remaining resilient and retail vacancy rates decreasing from five years ago. Mr. Willet, who focuses his practice on commercial real estate leasing, pointed out that despite the optimism, the bankruptcy or closure of any tenant, regardless of size, can create headaches for landlords; in particular, big-box tenants tend to have the edge in leasing negotiations for multibuilding shopping centers, making it important for lawyers advising retailers to draft agreements that allow for flexibility and maintain a favorable position for the landlord in case of a big-name closure.

"I haven't seen a power shift from big-box tenants to landlords in retail leasing," he commented. "There's always been the risk of, 'If this big-box closes, this could tip the scale for 10 or 15 of our other tenants in the center.'"

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