How Commercial Owners Can Help Their Tenants During The Tarrifs
The introduction of tariffs under the Trump administration brought significant changes to the retail landscape. Many businesses, especially those with international supply chains or reliance on imported goods, saw their operational costs soar. These shifts had a direct impact on small business owners, particularly tenants in retail spaces. As a property owner, it’s essential to recognize the challenges your tenants face and explore ways to support them during such uncertain times.
Here’s a guide for retail property owners looking to help their tenants survive and thrive, even in the face of increasing tariffs.
1. Offer Flexible Lease Terms
One of the most immediate ways property owners can assist tenants is by offering more flexibility with their lease agreements. Tariffs can be unpredictable, and businesses that rely on imported goods may see their costs fluctuate rapidly. By allowing tenants to renegotiate their leases, extend terms, or adjust payment schedules, property owners can help reduce the financial strain that might otherwise force tenants to close up shop.
Action Steps:
Offer rent deferrals or payment plans during tough months.
Consider modifying the length of lease terms to give tenants more security.
Reassess rent increases in the face of unpredictable economic factors.
2. Consider Rent Reductions
Tariffs have the potential to raise the prices of goods sold in retail stores. With an increase in costs, tenants may be forced to raise their prices, which could result in reduced customer traffic. A rent reduction can help tenants navigate the heightened costs without passing too much burden on to customers.
Action Steps:
Offer temporary rent reductions for tenants that are heavily impacted by tariff increases.
Provide a tiered rent model that can be adjusted based on the tenant’s revenue and ability to absorb the rising costs of goods.
3. Encourage Diversification of Suppliers
Many retail tenants rely on foreign suppliers for their merchandise, and tariffs directly impact the cost of those goods. By encouraging your tenants to diversify their supply chains, you can help them find alternatives that might mitigate some of the additional costs associated with tariffs.
Action Steps:
Offer connections or resources to help tenants discover new suppliers, both domestic and international.
Provide access to local industry experts who can help tenants negotiate better prices or identify more affordable alternatives.
4. Provide Financial Resources and Guidance
For tenants who are particularly hit hard by tariffs, it may be beneficial to offer or direct them to resources for financial assistance. Property owners can partner with local organizations or government programs that offer support during economic downturns or increased operational costs. Additionally, connecting tenants with business consultants or accountants can be helpful for navigating this turbulent period.
Action Steps:
Share information about government aid programs, grants, or low-interest loans designed to help small businesses survive during difficult times.
Offer referrals to financial advisors or small business consultants who specialize in navigating tariff-related challenges.
5. Promote Digital and Online Sales Channels
For retail tenants, the shift to online shopping during the tariff crisis could serve as a lifeline. Many businesses may struggle with the cost of in-store inventory, but online platforms provide a way to maintain revenue without relying on physical sales alone. As a property owner, you can encourage your tenants to build or enhance their online presence, which can help offset tariff-related costs.
Action Steps:
Offer resources or guidance for creating e-commerce platforms, including website development or integration with online marketplaces.
Provide marketing support by promoting tenant sales online or encouraging digital advertising for businesses impacted by tariffs.
6. Foster a Strong Tenant Community
One of the most valuable assets a property owner can offer is a sense of community. A strong tenant network can provide opportunities for shared marketing campaigns, mutual support, and collective problem-solving. Encouraging tenants to collaborate on joint promotions or shared resources, such as bulk purchasing, can help them reduce costs and increase foot traffic.
Action Steps:
Organize regular meetings or networking events where tenants can discuss challenges, share strategies, and collaborate on business solutions.
Create a communal marketing platform for tenants, pooling resources for advertising and promotions that can help mitigate the impact of tariffs.
7. Offer Marketing and Visibility Support
During tough economic times, retail tenants may struggle to maintain customer traffic. As a property owner, you can help tenants by boosting their visibility and driving customers to their stores through targeted marketing efforts. Joint marketing campaigns and promotions will help tenants stay top-of-mind and increase their ability to weather tariff-induced price hikes.
Action Steps:
Work with tenants to develop storewide promotions or discount events that can attract more foot traffic.
Use your property’s social media accounts or website to highlight tenant businesses and drive interest in their products and services.
8. Maintain Open Communication
In times of uncertainty, communication is key. Open and ongoing dialogue between property owners and retail tenants ensures that both parties understand each other’s challenges and opportunities. By being proactive and offering support when needed, property owners can build stronger, longer-lasting relationships with tenants.
Action Steps:
Set up regular check-ins to discuss tenant concerns, especially related to tariffs and their impact on business.
Be receptive to tenant feedback and willing to make adjustments as needed to help businesses survive.
Conclusion
The effects of tariffs under the Trump administration have been far-reaching, and many retail tenants are facing an uphill battle. However, as a property owner, you can play a pivotal role in helping your tenants not only survive but potentially thrive during these challenging times. By offering flexibility, reducing financial burdens, encouraging diversification, and fostering a collaborative environment, you can build stronger partnerships with your tenants while helping them weather the storm.
Support for retail tenants isn’t just an act of goodwill—it’s a smart business strategy. In the end, thriving tenants lead to a thriving retail property.