Let us help you take care of your retail property requirements. Jaymie Rowland is our retail property specialist and works with well-known retailers to reduce their property risks. Jaymie and her team take care of the time consuming and often time-critical details associated with running a robust, profitable retail portfolio, so retailers can focus their time and energy on growing their businesses.
Late last year, Jaymie had the pleasure of sitting down with Paul Waddy at NORA - National Online Retailers Association to highlight the importance of a strong property strategy for retailers. Listen or read their interview below for valuable insights into Jaymie’s retail knowledge.
For more on the NORA Network visit their website here.
Get in touch with Jaymie on [email protected]
[Paul Waddy | NORA]
Welcome to the Nora Showreels. My name is Paul Waddy. I am a member of NORA advisory committee and an ecommerce advisor, feel free to connect with me on LinkedIn if you want to learn more about what I do. Today we are lucky enough to be joined by Jaymie from Franklin Shanks. Welcome and thanks for joining us at NORA.
[Jaymie Rowland | Franklin Shanks]
Thanks so much Paul it is nice to meet you
[Paul Waddy | NORA]
Why don’t we start with a little bit of background about the company and the role you play inside the company?
[Jaymie Rowland | Franklin Shanks]
Yes- so Franklin Shanks is a commercial real estate advisory firm, we have been around for about 14 years now. I am relatively new to the team, and joined last year to head up our retail division. We look after commercial property from office to industrial to anything that you could think of that your business might need, but my passion is retail. I have been a retailer for longer than I am ever going to tell anyone here, so we help with everything from overall property portfolio management through to individual leasing acquisitions and pitfalls and things like that.
[Paul Waddy | NORA]
So your niche is retail, what makes Franklin Shanks different? What makes you the best?
[Jaymie Rowland | Franklin Shanks]
I like this question. We are different because we are small. We are a boutique agency and we were founded by Mike Franklin and James Shanks who both worked in large institutional corporate commercial real estate agencies -who shall remain nameless. They found they were consistently butting up against conflict between tenants and landlords, when you are one of the big firms and you have clients who are landlords and clients who are tenants someone is going to lose out, and invariably it is the tenant that loses out in that situation. So, we were founded to be entirely tenant focused. We do not represent landlords, and that allows us to not have any conflict of interest when we are negotiating a deal.
[Paul Waddy | NORA]
Interesting… so you are right on the tenants side, I like that already; this is an interesting one, I think in our stage as retailers or online retailers that we all have had to look at commercial property and often we go it alone and don’t always know what we are in for and things like incentives and all the terms of the lease, what are the things that retailers should come to you for rather than going it alone?
[Jaymie Rowland | Franklin Shanks]
Ughh, everything; and come to us before you sign anything. Seriously we often start conversations with people when something has gone wrong, when they have already signed a lease and they are stuck in it for whatever reason[[interviewer] “trying to back out of the lease?”] correct! Yes, over the last 18 months or so there has been a fair bit of that, so we certainly say that it is what we do all day every day, you know we spend every day talking to agents and operating in that marketspace so we know it inside out and read leases every day. Whereas even an average sized retailer who might have anywhere from 20 to 100 stores is still not doing that as a daily activity, and it is hard and you miss things and you are under time pressure—a lot of that fine print and critical dates can get lost.
[Paul Waddy | NORA]
I think that is a really good point and there are a lot of retailers –independent retailers, that occupy a lot of real-estate and they really don’t know what they don’t know, would I be right in saying that you could help a retailer not just in finding a property and getting them a great deal, but also as you pointed out; helping them through difficult stages as well where you may need to re-negotiate or even try to quietly exit a lease.
[Jaymie Rowland | Franklin Shanks]
Yup!, there has certainly been a lot of those conversations lately. We find we add value because we can be a little bit of a buffer and sometimes it is the case, particularly with independent landlords and tenants where, perhaps; the relationship has just broken down over time and no one is getting anywhere anymore. So, we sit as almost a neutral party and can say: “we know this is what the market rate is, we know what incentives look like at the moment; this is what we know to be a fair deal, it puts a little bit of a breather in place and allows the relationship to move forwards because ultimately you have signed a lease—whether it is for 3 or 5 or 7 or 10 years and you need to be able to work with your landlord. Having us able to step in and whether you need us to play good cop or bad cop we can do both.
[Paul Waddy | NORA]
Retailers might look at using a commercial agency or a tenant representative as a cost, but I would look at it as the cost is well and truly more than absorbed by the incentives maybe that you are able to get that are not able to be accessed – [[Jaymie] “come and work for us!”] – Do you feel that is a fair call?
[Jaymie Rowland | Franklin Shanks]
100%. We obviously don’t like to promise anything but it would be safe to say that we are not doing our jobs if we are not at least covering our fees by what we will save you. Everyone comes to us asking about what we can save them on their base rent, yes we can do that; but where we will really add value for you is in ensuring that the lease works for you and that we build flexibility in long term and that we remove as much ‘vaguery’ around the terms that are in the lease, so when something goes wrong you know where you stand and what you are entitled to, as opposed to ending up in lengthy negotiations with your landlord where it becomes a more hostile situation that it needs to be
[Paul Waddy | NORA]
Yeah I think that is a good point and one of I guess ‘gotchas’ that I have seen in a few leases and most of them have been stinkers, you know is not thinking about what happens when the lease expires and particularly when you are doing well and want to stay, exiting is one thing but what about the next 3 or 5 years and then all of the sudden you are hit with a 25 or 20% increase or God knows what else, what are some other ‘gotchas’ that people might not know about?
[Jaymie Rowland | Franklin Shanks]
I think certainly thinking about what happens when things go wrong is invariably- we all have a positive bias right?- and we don’t like to think about the rainy day. So it is things around whose responsibility are repairs and maintenance, who pays for what when something goes wrong, building in safety nets around how long you have if there is a breach of your lease—something people don’t tend to think about very often, and then those exit costs. At some stage you need to leave, hopefully because you have outgrown the space and everything is doing really well, but negotiating better terms around that can save you again, quite a lot financially but also in terms of stress when you get to that point.
[Paul Waddy | NORA]
Who are some of the clients you are working with and then the second part of that question is-we have probably got some good retailers listening- who are some that you would love to work with?
[Jaymie Rowland | Franklin Shanks]
Look, so I am going to shy away from ‘who are some of the retailers you are working with at the moment’, I haven’t told any of them that I was doing this today. Confidentiality is something that we pride ourselves on and we find that is often really valuable. Where we have found our niche is with retailers who have quite a strong ‘strip’ focus. That is, if you are a retailer that is predominantly you know—Westfield or Vicinity, then you are dealing with only a couple of agents to manage your whole portfolio, whereas for retailers who are into bulky goods or neighbourhoods or strips they might have as many landlords as they have stores. And that is really time consuming and also tends to have a lot more emotions in play when you have independent landlords rather than institutionals, so that is where we have picked up most of our clients. People that have anywhere from 10 to 100 stores around the country and are just struggling to look after that function in house with one or two property people, and the reason we are here with NORA—we are a new solution partner for NORA—is because we see the evolution that obviously e-commerce has had a pretty good couple of years, which is awesome (and I am an e-commerce manager from way back so it is great to see the industry doing really well), but that the next evolution we see for a lot of those online pureplay retailers is branching out into physical and it is hard to do and it is hard to do well. We would love to put our hand up and say let us help you with that strategy from the start so that you get it right and you are signing leases that will hold you in good stead for the life of the lease.
[Paul Waddy | NORA]
Yeah, I think that is a great way to round it out and speaking from experiences I wish that I had used tenant focused agencies right back at the start—you nailed it before—you will be more than covering the fee that is involved and not to mention the heartache as well.
So, Jaymie; really nice to learn about Franklin Shanks so thank you so much for joining the NORA showreel.
[Jaymie Rowland | Franklin Shanks]
It has been my pleasure, thank you so much.
