Bedrock to offer restaurants, retailers rent waiver in exchange for 7% of sales
Detroit's largest commercial real estate company is offering its retail and restaurant tenants a new form of rent relief, through an initiative called "Bedrock Relaunch."
Dan Gilbert's Bedrock is giving these tenants the option to pay 7% of gross sales instead of paying their regular rent.
Bedrock's new arrangement will go from July 1 through the end of 2020, as restaurants and retailers face opening up amidst COVID-related uncertainties.
It follows Bedrock's already waiving rent completely for this group of tenants in April, May and June.
"It's becoming clear that even when all business are able to re-open, it's unlikely their sales volume will immediately return to pre-pandemic levels," said Bedrock CEO Matt Cullen. "And we want to make sure that rent payments aren't a barrier to success."
"We want them to have confidence to re-open because if they don't, then obviously it really hurts the vitality of our community," Cullen said. "And we don't collect rent. Ultimately if somebody goes out of business, we have to re-tenant those stores. So it's a bit of doing good and doing well."
Bedrock Relaunch also allows the restaurant and retail tenants to apply their security deposits to re-opening costs and costs related to space modifications.
According to Cullen, 172 Bedrock tenants in Cleveland and Detroit are eligible for the rent relief, with the majority being in Detroit. He said he expects almost all of those eligible to choose the variable rent option.
Cullen said that in addition to rent relief, there are two other important components to Bedrock Relaunch. One is connecting its tenants to Detroit Mayor Duggan's "Detroit Means Business" program for access to technical and regulatory advice, financial resources, and personal protective equipment. The other is to assist tenants in enhancing revenue by working to encourage possible ideas like events downtown and street closures to increase dining capacity.
Bedrock reports having 210 office tenants and 125 retail and restaurant tenants in Detroit's downtown.