With retail in shambles, what happens to its real estate brokers? | Grant Mechlin Feature
April 02, 2020

https://www.bizjournals.com/st…

By Steph Kukuljan – Reporter, St. Louis Business Journal 3 hours ago

Longtime real estate broker Ian Silberman is used to being an expert for retail clients on the hunt to make a deal. But these days, Silberman, principal of Location CRE in Clayton, has more questions than answers.

What banks are still in the market? Which financing tools are available? Who will be eligible for the federal stimulus? How will this change real estate when the crisis is over?

Retail and hospitality are the industries hardest hit by COVID-19 with layoffs, furloughs and closures impacting stores and corporate employees. It’s forcing those working in related fields like real estate to shift their focus from deal maker to counselor.

“We’re trying to keep up on the data and information and speak with lenders, other brokers and investors. It can be hard to make intelligent, informed decisions. But we just have to pause, not panic,” Silberman said. “I’m still working a ton of hours. Nothing in this business comes easy.”

Deals are still happening, Silberman and other brokers said, just at a much slower pace. He declined to disclose specific transactions.

“There is a smaller group of retailers that are actually willing to pull the trigger and make the commitment. Those tend to be retailers with large cash reserves,” said Mike Swearngin, senior vice president of brokerage for Pace Properties.

But mostly, instead of spending most days in the car touring properties, St. Louis-area brokers are now at home making calls, attending Zoom conferences and devising strategies with clients for the future.

“We’re looking out and planning for when the flood gates open in the second half of the year and we’re in a good position,” said Grant Mechlin, managing director of retail services for Sansone Group.

Planning “is a challenge, but solid tenants with good financials in a normal environment, we want to make sure we have a growth plan in place for them and understand their criteria,” he said.

Brokers say there are opportunities to leverage the situation. Silberman and his team, for example, are creating a job board to help real estate professionals that have been laid off or furloughed.

“You’re seeing layoffs that have nothing to do with the performance of the person or company,” Silberman said. “These are the best of the best. It’s going to create a huge opportunity afterward.”

However, unknowns still exist — such as what industries, companies and technology will be created to address inefficiencies and new ways of business, brokers said.

They are expecting a bounceback in consumer shopping and spending.

“Three to four months from now, when we get the all clear, people will be in a hurry to shop,” Mechlin said. “We’re going to see a holiday-type of shopping.”

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