Retail tenants may take this long to reopen
One of Orlando’s most active developers and landlords last week told OBJ that nearly three-quarters of its retail tenants couldn’t meet their lease obligations due to the coronavirus pandemic — something being seen throughout the region and world.
But Unicorp National Developments Inc. President Chuck Whittall said he’s confident that the surviving tenants from this economic crisis will need only a few days to reopen once they get the all-clear.
It may even be within the next few weeks in Central Florida, as U.S. cities and states see a flattening of new novel coronavirus cases, Whittall said. That’s welcome news for Unicorp, which has seen retailer rent collections drop to about 50%.
“I believe next month things will start to open again,” Whittall said. “And by the end of the year, we’re going to be in pretty good shape.”
Unicorp’s experience is an example of what’s happening to many companies who do business in Orlando’s leisure and hospitality industry. The sector, which includes retail workers, is metro Orlando’s biggest employer and supplies about 20.4% of the region’s jobs, the U.S. Bureau of Labor Statistics reported. In total, the industry accounts for about 280,000 localjobs.
Of course, Whittall doesn’t expect everything to reopen at full capacity. Restaurants may be allowed to operate one-third of their tables and movie theaters wouldn’t be able to sell every seat.
Still, Whittall was more optimistic about the economy last week than the previous one — a week that saw the S&P 500 climb 10% as of late afternoon on April 9. He even has plans to reopen his southwest Orlando restaurant, Slate, on May 7.
Industry pain
The pandemic has hurt business at Unicorp, so the company and its associated businesses have applied for Payment Protection Plan (PPP) loans through its bank, Conway, Arkansas-based Home BancShares Inc. (Nasdaq: HOMB).
The firm is seeking assistance with its payroll, Whittall said. It has had to furlough hundreds of employees due to business interruption, but hopes to hire a majority back when the PPP money is approved, he said. Currently, Unicorp is paying for the furloughed employees’ health insurance. Whittall said he hasn’t been approved yet for the PPP money.
And not all retail tenants will survive this economic crisis — particularly the ones that were more volatile heading into the pandemic. “This has got to be the tipping point for those companies.”
That said, no tenants have walked away from Unicorp’s future projects, such as the developer’s proposed $1 billion O-Town West near Walt Disney World, he said. That includes Orlando-based Marriott Vacations Worldwide Corp. (NYSE: VAC), which inked a nearly 300,000-square-foot office deal to consolidate its headquarters there. A representative with Marriott wasn’t available for comment.
But Unicorp did lose one tenant due to COVID-19: a major entertainment company that had signed a lease at one of its Central Florida projects. Whittall declined to say who that tenant was and where they were going, but Unicorp already is moving ahead with another lessee to replace that tenant, he said.
“We came down on a quick elevator and we’re going to go up on a staircase.”