Why Retailers Should See Leases as Strategic Assets

-- Veteran A&G lease negotiator advises engaging creatively with landlords to drive higher performance.

NEW YORK, April 16, 2026 /PRNewswire/ -- Retail chains can gain an edge by thinking of their leases as strategic assets rather than mere liabilities, advised an executive from national advisory firm A&G Real Estate Partners.

"That might sound like verbal jiujitsu, but the right approach can help you achieve real-world outcomes like reducing your occupancy costs or reinvesting in your stores," advised A&G Senior Managing Director Tony Grant in an Expert Viewpoints piece for Chain Store Age Online.

Grant has negotiated more than $500 million in lease savings on behalf of retail, restaurant and fitness operators in his 20-year career. In the March 13 column, he offers three tips for healthy and distressed chains seeking to ramp up real estate performance.

Start the conversation—even if you're healthy
Grant advises even healthy operators to consider the benefits of real estate restructuring, noting that "the smartest retailers are always looking for ways to generate more value within the portfolio."

He uses the example of a coffee house chain with leases expiring in 10 locations.

"These stores happen to be in need of a refresh: updated bathrooms, modern finishes, and repainted exteriors," Grant writes. "Instead of continuing with business as usual, why not walk into those landlords' offices and start a dialog about the future?"

The coffee chain, having decided that each location needs $150,000 in reinvestment, asks its landlords for tenant-improvement (TI) allowances of 20 or 30% as well as two-year lease extensions at flat rent. "Taken together, the rent savings plus that TI allowance translate into $50,000 kicked in by the landlord," Grant writes. "That means the retailer is able to save $1.5 million across the 10 locations … There are many different possible permutations. The key is to take the initiative and engage in those discussions."

Take a second look at your store footprint
Retailers with oversized locations should consider carving out useable space for the landlord. "In many cases, landlords are able to use that clawed-back space to create another storefront and bring in a new tenant with good credit and an attractive rental rate," Grant writes.

The original retailer benefits by reducing real estate costs on its profit-and-loss statement: A 30% space reduction translates into 30% lower gross occupancy costs, due to the reduced base rent for that now-smaller space. This approach can allow operators to keep less inventory on hand while lowering head counts and utility bills. "Right-sizing while maintaining your existing revenues can yield substantial, across-the-board savings," Grant advises.

Be transparent about your challenges

Retailers can do better in landlord negotiations when they strive to be transparent about their financial situation and needs. That might help them persuade the landlord to "reset" the lease and negotiate a permanent rent-reduction, or get through a difficult stretch by winning short-term rent abatement.

Most of the time, Grant observes, landlords are highly motivated to work with struggling tenants because "the entire center suffers when tenants are unable to make rent."

These dynamics are part of what enables third-party real estate advisors to generate hundreds of millions of dollars in savings in retail and other sectors. A&G, for one, has sold over $13 billion in properties and leases and negotiated over $12 billion in occupancy-cost savings for clients.

"While your accountant can't literally move your leases into the 'assets' column," Grant concludes, "a little creativity can go a long way when it comes to getting the most out of your real estate."

Read the full article here: https://chainstoreage.com/how-put-retail-leases-asset-column

Media Contacts: At Jaffe Communications, Elisa Krantz, (908) 789-0700, [email protected].

SOURCE A&G Real Estate Partners