Shaun Benderson is a true expert when it comes to retail properties. He has worked on commercial projects in Phoenix, Tampa Bay, Sarasota, and more. Essentially, he seems to always be able to stay ahead of the news and get a scoop project and make it big. But one of the ways he believes he has been able to do that, is by understanding what it means to manage a retail real estate portfolio.
Shaun Benderson on the Retail Portfolio
It is very important to make sure a retail portfolio only includes high performing properties, getting rid of anything at risk of becoming dead weight. This means they must also have a full understanding of the earnings before interest, taxes, depreciation, and amortization (EBITDA), understanding which properties add value to the complete chain and contribute the most to the bottom line. Additionally, they must have a full understanding of the different types of properties (owned with mortgage, owned without mortgage, leases, and partial leases) that exist in the portfolio, identifying which ones should be invested in, and which ones should be divested.
Key Elements of Managing a Retail Portfolio
A good portfolio manager like Shaun Benderson will always:
- Know the relevant lease term dates, but also any other trigger dates leading up to that. This ensures they can determine the long term viability of leased properties in particular, ridding themselves of the dead weights.
- Know the relevant exercise dates, which means they don’t accidentally roll over into another three to five year commitment to an undesirable property. Again, this isn’t just about focusing on a single date, but rather on all the dates leading up to that as well, ensuring the right discussions are held with the right people before then.
- Manage all the options that remain within the portfolio properly. This means that they should know when to have negotiations and with whom, when changes are going to take place, which deadlines exist, and so on.
- Be able to make tough decisions. If a store within a retail portfolio underperforms, it should be removed, no questions asked. Strategic thinking means making choices that others will not like.
- Renegotiate the rent. They have to make sure that they conduct their own market assessments to determine whether the rent they pay to landlords, or the rent they receive from tenants, is appropriate and relevant to the market, renegotiating different terms and conditions wherever possible. Again, this must be done at the right time with the right people.
- Be able to divest and re-locate. Sometimes, stores have to close down, either permanently or by moving them to a new location. A good portfolio manager will know when it is time to do this and they will focus on making those improvements when necessary.
Being a retail portfolio manager is hard work. It requires a coordinated approach with a lot of forethought. It also means putting the appropriate strategies in place to get the most out of the available portfolio.