Will suburban landlords offer rent relief to commercial tenants?
As COVID-19 restrictions enter their second calendar month, no clear trend has materialized as to whether shopping centers and other commercial landlords will offer rent flexibility to their directly affected tenants.
But there seems little pretense that they can remain an unscathed part of the economy with Tuesday's news that retail real estate giant Simon Property Group -- the parent company of Woodfield Mall in Schaumburg, Gurnee Mills in Gurnee and others shopping centers in the Chicago area and across the nation -- furloughed 30% of its employees.
Even in Schaumburg, normally the second-largest hub of economic activity in Illinois, the question of rent relief remains open-ended.
"I did reach out to shopping center owners asking them to be flexible." Schaumburg Economic Development Director Matt Frank said.
It is unknown how responsive those owners have been to his request, he added.
Simon Property Group officials Tuesday did not immediately respond to requests for comment on how its malls are handling tenant rents while shut down.
No firm precedent appears to have taken hold in Hoffman Estates either, according to village Economic Development Director Kevin Kramer.
"I don't believe there is a prevailing reality," Kramer said. "I've heard a wide variety of ideas from property owners but none of them deciding on anything firm yet."
Tricia O'Brien, president of the Hoffman Estates Chamber of Commerce and Industry, said she had not heard about agreements between member businesses and their landlords, but she considers the dilemma an obvious one.
"Honestly, when you're not bringing anything in, how can you pay your rent?" she asked.
Dave Parulo, president of Meet Chicago Northwest, the predominant tourism and visitors bureau for the Northwest suburbs, said he's not aware of rent abatements or extensions among the hospitality businesses he represents.
The New York-based International Council of Shopping Centers has not taken a position on rent relief, believing it is an issue for individual tenants and landlords to decide, Media Relations Manager Shannon Troy said.
But the council was one of 36 business associations to sign a letter Tuesday urging President Donald Trump and members of Congress to approve a proposed COVID-19 Business and Employee Continuity Fund as an additional economic stimulus to the previously passed Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The joint letter describes the disruption to business and the U.S. economy caused by the COVID-19 outbreak, but doesn't specifically address the question of commercial landlords offering rent relief to tenants.
ICSC President and CEO Tom McGee issued a statement Tuesday urging support of the proposed federal funding.
"The long-term strength of the shopping center industry is critical to the economic, civic and social viability of communities across the country," McGee wrote. "Without broad-based federal action, the impact of mandated closures put in place by federal, state and local officials will result in significant economic damage, empty storefronts and vacant shopping centers across the country, leaving communities in shambles."