5 Questions With South Florida Retail Landlord Beth Azor

Azor runs Azor Advisory Services, a leasing, management and development firm. Among her properties are the 70,000-square-foot Plantation Crossing in Plantation, the 43,000-square-foot Shoppes of Arrowhead in Davie and the 45,000-square-foot Sawgrass Commons in Sunrise.

Azor spoke with Commercial Observer about the lessons she learned during the pandemic. 

We’ve heard a lot about the struggles of retailers during the pandemic. What was it like being a retail landlord during COVID-19?

You always heard the saying location, location, location. Never was it more evident than when you went through COVID and you had both local tenants and national tenants. Some were shut down for months on end. But by being in locations surrounded by high incomes and good demographics, those shopping centers thrived. For the shopping centers in areas with high disposable incomes, the shoppers continued to shop. They didn’t hunker down and they weren’t as fearful.

For tenants, “pivot” became the popular word. Restaurants pivoted to takeout. We have Laspada’s Original Hoagies as a tenant at Shoppes of Arrowhead. They had just launched an app before COVID, and that saved their business. If they had been taking phone orders, there wouldn’t have been enough phone lines or enough people to answer the phones. Even the retailers pivoted. Our tenants have recovered and recovered well. A couple of my hair salons are significantly busier than they were pre-COVID. But they are scared to death that the government is going to shut them down again. That will be the big fear for the next couple years.

What was the biggest surprise during the pandemic?

Prior to the COVID situation, none of us had ever lived through the government shutting down our businesses. You always signed national credit tenants, because those were the tenants who paid always and forever. Then, when COVID hit, a lot of them looked at ways to stop paying the rent. Whereas the local tenants would say, “Let me pay half rent.” That was very eye-opening. You have to have national tenants because the banks finance on national credit tenants. But this experience will change the way everyone looks at writing leases going forward. 

What’s your main challenge now?

Buying more properties. The pricing has skyrocketed. We’ve had this huge domestic migration to Florida, especially from places like New York and California that are much higher priced than Florida. The new competition sees our pricing as low, so we’re being bid out by others. That’s a huge headwind. We want to buy more, but we can’t compete. We’re being priced out by our new neighbors.

So how are you coping with these prices? Are you adjusting your expectations, or waiting for prices to cool or even correct?

The pricing will adjust, yes. I don’t think it will go down. There may be a correction, but you can’t wait on that. Relationships are key—talking to people who aren’t sellers today but hopefully creating a relationship so you can get an off-market deal. You have to be creative.

We’re hearing a lot about inflation. As we come out of the pandemic, what do you see as the biggest risk?

Rents are going up. Our tenants don’t have to rely on discounts. For the first time in decades, they are selling things at full price. I think inflation will adjust. We’re not as fearful of inflation as we are of another shutdown.

Jeff Ostrowski can be reached at jostrowski@commercialobserver.com.