Most tenants and landlords operate under the belief that once their lease is signed that neither party would be willing to change it. After all it’s a lease - a legal document - the contract between the landlord and tenant, a “historic documents” like the Declaration of Independence or the Bible. It was drafted by several brilliant lawyers and should never be altered by mere mortals!!

Think this through and you reach the opposite conclusion. The lease document represents the agreed position of both parties at a point in time. Change is certain and the relative positions of each must have changed as both moved to the current point in time. Can you change the lease? YES YOU CAN, but you first need make a realistic determination of what has changed for both parties, what negative events have or are about to happen to each and what actions you can take to avoid these unpleasant future events.

The trick to all of this is understanding the landlord’s needs at a point in time vs. the tenants needs at the same point in time. This could be today or at some point in the future (i.e. the upcoming renewal.) What do you have to trade? How much is it worth to both the landlord and tenant? What can you get of equal value? When that point in time arrives, you then bundle both needs in a package and present them to the respective party.

In order to do this you need to put on the opposite hat. Be the landlord or tenant; look around the center where your store is located. What is wrong or missing? How could you make more money from the real estate? What do you need to achieve a higher return on your investment? What or who stands in your way?

I recently represented a tenant who wanted to close or reduce the size of a poorly performing store. They believed that the landlord would have to be paid to a fee to accomplish their goal. The lease imposed significant use restrictions on the landlord. When the lease was signed Kmart looked like a good long term bet, but now it was vacant. They were both at a new point in time but just did not realize it. We were able to recognize this and lead both to a more comfortable new point in time. The landlord got relief and was able to divide the vacant store into three new tenant spaces. Our client got her store size reduced and the rent for the remaining space was reduced well below the market value of the space at NO cost to my client.

So next time your store or shopping center is in a bad place, give some thought to your new point in time and where your respective party stands. Can you change the lease to recognize the new point in time?
– YES YOU CAN!

Jerry King
jking@rent-research.com
Rent Research Consultants, Inc.

Al Gore’s movie and Nobel Prize, Kyoto, green credits, demand response, wind farms, smart grids, record oil prices and the list of reasons energy is such a hot topic goes on and on. Venture capitalists poured over $148 billion into clean energy technologies last year alone.

According to a Wall Street Journal survey of the Fortune 1000 annual reports, over 65% of these companies have the support of the CEO and Board for clean energy initiatives.

It’s a dizzying sea change of activity in the energy markets that will affect the next few years and beyond in ways we have never seen before. The impact on multi-site organizations is being felt from the bottom line to the boardroom to store operations and beyond. Focus on energy management from commodity procurement, facilities management, environmental controls, utility program management, and the myriad of options for efficiency projects and incentives, not to mention the swarm of vendors knocking on the door, is creating unique issues for multi site companies. The need for help in sorting this out, tracking it and making sure the performance and return on investment is captured has never been higher.

Join Peter Weigand at AMTdirect’s 2008 User Conference for a discussion on clean energy technologies, current and pending regulatory changes and key trends that will impact your organization in the very near future. Also learn how AMTdirect is getting involved to develop technology aimed at helping multi site companies manage their energy programs.

The FASB (Financial Accounting Standards Board) and the IASB (International Accounting Standards Board) recently announced a joint project to rewrite the lease accounting standard. The FASB and IASB have tentatively concluded that virtually all leases should be reported on the balance sheet. But most leases are currently considered off balance sheet financing. In an recent interview conducted by Chain Store Age, they explain how these new rules could impact retailers in a big way.

For example, a majority of store leases set by retailers can be 15 or more years, especially if you are including renewal options. But they are often structured as operating leases. By treating these now as capital leases, the impact on the balance sheet could be substantial.

Georgia Tech recently conducted a study showing the potential impact on retail companies. They estimated a median 5.3% decline in reported earnings for fiscal year 2006. The impact on the balance sheet was considerably greater: 14.6% increase in assets, 26.4% increase in liabilities. This would be a significant hit to financial ratios. These changes may mean that growth requires more capital to meet loan covenants and investor expectations. For some companies, the effect could be several times the median, depending on how they do their leasing.

FASB plans are expected to release an exposure draft later this year with a final standard in 2009. Projections when this would take effect could occur at the start of 2011. For retailers in strong financial positions, the consideration of whether they should lease-vs.-buy could tilt more to buying real estate. According to reports, there is a large discrepancy between reporting; some retailers report a large number of capital leases or owned stores, while others have none. As a result, these changes could be viewed as good or bad depending on your organizational structure.

Throughout the past couple of months, the AMTdirect team has been working hard to offer a new hands-on format to this year’s user conference. As a result, we are excited to be able to give our users an in-depth insight into our product and the industry. This year’s conference will offer a variety of new classes ranging from advanced hands-on SQL classes to the latest in Emerging Data Standards. Take a look at all the sessions being offered this year. Don’t forget! Early bird registration ends February 8.

Nearby Attractions

The location of the User Conference will be at the Omni Hotel in downtown Charlotte. The hotel is about a ten to fifteen minute cab ride from the Charlotte Douglas Airport. For those coming in early or staying late, there are a variety of nearby attractions.

Charlotte has seen a massive revamp in its downtown area over the past two years. Within walking distance of the hotel, we have the Blumenthal Arts Center where you can get all the best of the performing arts without buying a plane ticket to the Big Apple! The Broadway show Wicked will be playing during the month of April at the Blumenthal Arts Center.

The Charlotte Bobcats will also be having a game during the week of our User Conference and is a 5 minute walk from the Omni Hotel. Across the street from the Omni Hotel, is the new Epicenter which is a large mixed retail and entertainment center. Still craving more, then take a short stroll down the street to see the numerous bars and restaurants offering a variety of food and entertainment choices.

This year’s user conference will be focused on in-depth hands-on-training, but for those who will have some extra time, I encourage you to check out the Charlotte area. Don’t forget, if you have already registered, you still need to book your hotel room.

Corporate-sponsored volunteerism certainly isn’t a new concept. For years now, American Employees have volunteered coordinating food drives, mentoring students, serving on advisory boards and providing support to many community-based projects, often with (or without) the support of their employers. 

Increasingly American companies have begun structured volunteer programs which are integrated into core business strategies.  These programs are designed to help the communities they serve.  Additionally, they’re now also being used to help employees develop greater understanding, sensitivity and involvement in their communities.  

Here at AMTdirect our Employees with Management’s support have been involved in several community-based projects.

• A family of four who recently lost all their belongings received $350.00 in cash, a number of store gift cards and several large boxes filled with food items, household goods, etc.
• An Employee indicated a need for items to supply two children who she was fostering with clothes, diapers, toys, etc.  It was a departmental request, which was met with over-whelming Employee/AMTdirect response!  Cash, store gift-cards, food items, toys…and the list went on and on….
• Involvement Big Brothers/Big Sisters school based mentoring program is also underway.  Employees are permitted to get paid for time away from their normal work schedule to mentor a student from a local elementary school.

Besides being the “right” thing to do, this community involvement also support’s AMTdirect’s corporate values of collaboration, interdependence, accountability and stewardship.

Those who expect moments of change to be comfortable and free of conflict have not learned their history.  ~Joan Wallach Scott 

After months, maybe years, of justification, project buy-in and approvals, budgetary authorization, vendor review and selection, reference checking and protracted contract negotiation, you have finally arrived!  It’s time to begin your software implementation.  Your project will involve some or all of the following steps:  data mapping and conversion, document organization, imaging and indexing, software training, abstraction, gap analysis, first-time integration with your financial systems, testing, running parallel, creating new processes and procedures - - - it can be a lot and the project must be managed.  But this is what you’ve worked so hard for and you’re eager to begin, eager to improve your department’s and organization’s efficiencies, productivity and save bottom-line dollars, as well, with your new technology.  You’re excited - - isn’t everybody? 
Read the rest of this entry »

I recently substituted for one of AMTdirect’s Technical Support Personnel while one of our full time “Techies” was on vacation.  This wasn’t that much of a stretch for me because I used to work in that position, but it always amazes me how shocked people are when you’re nice to them.   

Where has Customer Service gone? Why should we be shocked when we get a “live” person on the line on the first try without pressing 20 buttons and wasting 45 minutes of our precious time, and why should we be shocked further by the person who answers the phone being nice to us and doing what he/she says she’ll do?  It’s such an easy thing to do – treat others the way you want to be treated, but still it’s seldom done.  Simple Solution – Be nice. 

I remember when I first started my journey at AMTdirect over 2 years ago – I was LOST!  It helps to remember where you’ve come from – not just where you are now.  That’s what I do when I work Tech Support.  I remember that a lot of the people on the other end of the line are just like I was:  wanting answers from a real person who is patient, and takes the time to work through their problem like it was my own!  They want someone who will listen to their issue, find a way to solve it, or if that can’t be done, create a case for it, and follow up!  They just want to know that their problem is not only real to them, but it is also real to someone else.  Simple Solution – Listen. 

Sometimes, the real problems also have a simple solution.  When someone works with Tech Support to solve their issue, and we take you through the steps to solve the issue, remember, that many times, you have to restart your computer before the “solution” will work. This is the computer saying, “I learned something new – now I have to add it to my brain.”  It may also be as simple as adding the url as a trusted site, or allowing pop-ups from the web site.  These little things can keep the User from getting into the system; which is a Real Problem.  Simple Solution – Restart the computer, allow pop-ups, and add the site as a trusted site.   

Sometimes, Tech Support professionals are not so lucky, and the issue is something we cannot solve on the phone, so we pass it along to the “Real Computer Gurus” to get the ball rolling.  Either way, communication is the key.  Our Clients are the most important part of AMTdirect, and without you, we wouldn’t be here.  So if you need us, give us a call or shoot us an email – we will be here for you, as always, to create Simple Solutions to your Real Problems. 

Scenario 1:  Sue is a tenant of Bob’s pursuant to a Lease with a 10-year Initial Term.  It is 6 months prior to the expiration date of the Lease, and Sue’s renewal option provides for at least 3 months written notice to Bob before the expiration of the Initial Term if Sue would like to continue her tenancy for another 5 years.  Sue’s business is prosperous, and she would like to exercise her 5-year renewal option.  Therefore, she types a letter notifying Bob of her intent to continue her tenancy, signs the bottom of the letter, and places the letter in a UPS box for overnight delivery to Bob. 

Scenario 2:  John is the LL of a 40-story building in Charlotte, NC.  The building is at 95% capacity when he is approached by Jane.  Jane would like to rent the entire 23^rd Floor of the Building to accommodate her mortgage lending business.  John is thrilled because he has been trying to rent out the 23^rd Floor for quite some time.  He currently has 2 tenants on the Floor; however, in each of their leases, John negotiated for a relocation clause, which allows John to relocate the 2 tenants upon 90 days written notice.  John may relocate these 2 tenants currently occupying part of the 23^rd Floor to other suitable space within the Building.  John decides it is more profitable to have Jane occupy the entire 23^rd Floor, so he types letters to the 2 tenants on 23^rd Floor explaining where they will be relocated within the Building.  Then, John decides, as a personal touch, to hand-deliver the letters to each of the tenants. Read the rest of this entry »