Walgreens has become landlords’ favorite tenant during the pandemic, according to a survey of shopping center managers conducted by Retailsphere. The consulting firm asked dozens of shopping center managers in early September. About 22 percent said a grocery chain was their best tenant. Specialty retailers and big-box retailers were not far behind, each accounting for 15 percent of the respondents’ “best COVID-19 tenants.”
Ten percent cited Walgreens as their best tenant during the pandemic. The only other brand mentioned more than once was supermarket Publix, which accounted for 6 percent of responses.
Which tenants have been the best during the COVID-19 pandemic?
Retailsphere also asked shopping center managers which tenants had been most difficult to deal with. Twenty-eight percent cited a restaurant.
It’s no surprise, considering Walgreens had paid 99.5 percent of its rent in August by the end of the month after paying 94.9 percent in July, according to research firm Datex Property Solutions. The drug store sector as a whole paid 99.3 percent of rent owed in August and 96.9 percent in July. Meanwhile the specialty restaurant sector paid only 58.4 percent in August and 48.5 percent in July.
But what else makes for a good tenant? Most respondents to the Retailsphere survey said their best tenants were good communicators that rarely complained, according to Retailsphere founder Mike McKean. He said managers’ favorite tenants kept property managers posted on how their businesses were performing and didn’t try to avoid conversations.
“Most of the worst chains aren't communicating because they simply don’t want to pay rent, so they're operating under the idea that if they just cease communication, then the shopping center can’t and won’t do anything about it,” McKean said. “And most of the larger chains have the benefit of a corporate strategy being passed down to them for dealing with COVID-19. Unfortunately, small retailers/mom-and-pop shops are having to navigate the pandemic on their own, so their reaction is often much slower and less precise. And that usually leads to those mom-and-pops avoiding communication with their shopping center managers.”