The FORT Podcast: Beth Azor – CEO of Azor Advisory – The Shopping Center Canvassing, Prospecting, and Leasing Queen!
Beth Azor is the founder and CEO of Azor Advisory Services (AAS), a leading commercial real estate advisory and investment firm based in Weston, Florida. As its principal, Beth currently owns and manages six shopping centers in Florida valued at over $100 million. She travels the U.S. consulting with, brokering deals for, and training associates in the commercial real estate industry.
On this episode, Beth discusses how to drive the most value to a leasing center through leasing best practices, Impulse vs destination tenants, and the best practices for structuring a retail lease from decades of practice. Chris and Beth also chat about what makes the best deal for landlords and a lot more!
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(03:07) – Beth’s Career in Real Estate
(14:54) – Why was it so tough to bring in talent horizontally?
(18:15) – Where did you develop this leadership style?
(19:34) – How do you define canvasing & prospecting?
(21:48) – Do most tenants already want to expand when you prospect or do you need to sell them on the idea?
(22:52) – What are the critical components of an amazing leasing agent?
(25:21) – What’s your solution to someone who is afraid to go talk to a stranger?
(28:19) – What are the main reasons a tenant is happy where they are or unhappy where they are?
(33:15) – Impulse Tenants vs. Destination Tenants
(40:53) – What is Dwell Time?
(43:14) – “Your leasing competitor across the street is your best friend”
(45:53) – What would be a reason you don’t provide TI knowing the leasing agent across the street does?
(47:29) – What is Occupancy Cost Ratio?
(49:59) – Sales Reporting in Leases
(50:58) – Percentage Rent Deals
(53:54) – Relocation Clauses
(55:51) – Grace Periods to Pay Rent
(58:24) – What else have you learned are must-haves in a lease?
(1:00:48) – Are there any lease clauses that linger post-covid?
(1:03:22) – Why would a great property be okay with a pop-up shop?
(1:08:12) – Is there ever a time when a tenant brings too much traffic?
(1:10:38) – How does the delivery economy (Uber Eats, DoorDash) impact shopping centers?
(1:14:42) – What is the Circular Economy?
(16:02) – What gets you to a quick no when you’re buying a property?
(18:17) – Do you have tenants on the hook before you develop a property?
(1:19:08) – Are you doing Triple Net leases or Gross?
(1:19:26) – What are you responsible for as the landlord that is unique to the asset class?
(1:20:48) – Is it true that grocery stores pay less rent?
(1:20:58) – Why don’t you like CoStar? Are there any online tools that you do like?
(1:22:43) – How do you conduct a market survey?
(1:24:26) – Why is traffic count so important?
(1:25:12) – How do you respond to the media accusations that retail is dead?
(1:29:15) – How can people engage with you online?
Episode Summary
Beth Azor, esteemed for her unparalleled insights into the retail real estate sector, graced Chris Powers’ podcast with her presence, bringing forward a wealth of knowledge, not just from her years in the industry, but also from her hands-on experiences. This enlightening episode delved deep into the intricacies of retail real estate, canvassing techniques, and the challenges and opportunities presented by the digital transformation in the retail world.
Azor began by shedding light on the growth of in-store retail sales, highlighting a common misconception that online sales dominate the market. With a mere 20% of retail sales online, the narrative around digital retail overshadowing physical stores has been put into perspective. What’s more, renowned online retail brands, such as Bonobos and Warby Parker, have begun to recognize the advantages of physical stores. The cost benefits of establishing physical stores, in contrast to the higher customer acquisition costs online, are driving this transition. The industry is poised for a revolution, with numerous digital retailers anticipated to open physical outlets in the coming years.
Diving deeper into the world of retail real estate, Azor emphasized the importance of canvassing – a proactive approach to seeking potential retail opportunities by directly knocking on doors. This hands-on approach, integral to Azor’s success, involves direct interactions with potential tenants and is particularly pertinent to the retail domain. The sheer audacity and determination required for such endeavors, such as cold calling property owners, reflect the tenacity of industry professionals.
Lease negotiations emerged as another focal point. The dynamics of lease terms, negotiations, and the importance of certain clauses, like the relocation clause, were meticulously dissected. Azor provided invaluable insights into scenarios where tenants were offered rent reductions or had pre-existing contracts significantly below market rates. These intricacies, often overlooked, play a pivotal role in shaping business trajectories.
The implications of the COVID-19 pandemic on lease agreements took center stage. While some landlords and tenants incorporated pandemic-specific clauses in their leases, others favored adaptability, choosing to address challenges as they arose. Azor’s tales of tenant resilience during these unprecedented times, from incorporating credit card payments to capitalizing on delivery services like DoorDash, underscored the industry’s adaptability.
A notable segment of the conversation revolved around the rising costs associated with services like Uber Eats and DoorDash. Azor illuminated the challenges faced by landlords due to the fees these platforms impose. The discussion underscored the perpetual nature of property upkeep and the intricacies involved in striking a balance between operational costs and profitability.
In conclusion, this episode with Beth Azor was a treasure trove of industry insights, offering listeners a panoramic view of the retail real estate sector. From canvassing techniques to lease negotiations and the evolving dynamics of retail in the digital age, the discussion was rich with actionable insights. For professionals and enthusiasts keen on understanding the nuances of retail real estate, this episode stands as an indispensable resource. With Azor’s expert reflections guiding the narrative, listeners are equipped with the knowledge to navigate the complex waters of today’s retail real estate landscape.
The Fort is produced by Johnny Podcasts