The Secrets Behind Successful Retail Real Estate Leasing

Aviva (00:00)
This week's Listener of the Week is Champion Goat. Champion Goat, I don't know who you are or where you're from, but thank you for that five star review. And for those of you listening, if you leave us a five star review below, you might be next week's Champion Goat slash Listener of the Week, week, week. This week on Conversion Real Estate Secrets, we have my friend Gabe. Gabe is out of, what part of Florida are you in?

Gabriel Gonzalez (00:26)
I am 305 Miami.

Aviva (00:27)
Okay, we got 305 in the house, Mr. 305, for all intents and purposes. And Gabe is a, do you call yourself a broker, advisor, babysitter?

Gabriel Gonzalez (00:35)
I think officially I am the senior leasing agent for Regency. So I don't think we're allowed to call ourselves brokers.

Aviva (00:41)
Is that a, is that a state thing because, okay.

Gabriel Gonzalez (00:44)
I don't know. I don't understand the politics of it all.

Aviva (00:46)
People are starting to get really creative with what they call themselves and I'm just.

Gabriel Gonzalez (00:50)
Yeah, I'm just a guy that leases retail spaces.

Aviva (00:52)
Okay, well, Gabe, thank you for being on the show. So Gabe, I'm really excited for this episode because Gabe brings a really different aspect of the brokerage business in that he works with the Tippity Top. He's dealing with Regency Centers who are some of the biggest names in retail. And...

Gabriel Gonzalez (00:56)
Thank you for having me.

Aviva (01:13)
When I generally come from the lane of mom and pop, he is dealing with literally quite the opposite. So Gabe, thank you for being on the show today. It's always great to see you. Can you tell the listeners who you are, what you do and why we're here today?

Gabriel Gonzalez (01:22)
Thank you. It's always a pleasure.

So I'm Gabriel with Regency. We're a publicly traded company. We own roughly at last count 450 grocery anchored, predominantly grocery anchored shopping centers across the United States. I handle the retail leasing in South Florida for roughly 3 million square feet of class A, class B, retail, open air shopping centers. I'd say 99% of it has a grocery store.

And so that's if you see, you know, your public says your Walmart, your Trader Joe's, Whole Foods, that's typically what the field that we that we play in.

Aviva (01:58)
How did you get in the business?

Gabriel Gonzalez (02:00)
So funny enough, I was dating my wife at the time and they had a realtor who was helping her parents flip homes. And I was like, I can do that and I can do it better than him. And so I got into residential real estate, hated my life for two years, and I accidentally did an edible arrangements deal at a friend's uncle's strip center. And through that process, I was like, I enjoy this, this is a lot of fun.

And then I kind of transitioned from the residential side into commercial, which is that my daughter is 17. So 17 years ago. So 15 years ago, I transitioned into commercial, the hard way doing every kind of deal imaginable and kind of working my way into the landlord role from there.

Aviva (02:37)
So I laugh because I think every broker starts just trying to do any deal that they can. Do you have any really memorable deals from that period of your career that you could talk about?

Gabriel Gonzalez (02:43)
Yeah. Anything.

that I can talk about. There was a gentleman who was trying to open a billiards hall. And so I didn't know about rules and restrictions and county ordinances and everything. And so we did a deal with him in a warehouse in an industrial part of town. And he ended up doing a, it ended up being a strip club.

long of it short is from that and he was also growing marijuana in the back of the building and So we ended up it turned into a whole thing it was all over the news back then and this was like the third deal I ever worked on and I was like, well if this is how my career starts, I guess it could only go up from here such a typical Miami story But the guy ended up getting arrested we had to get deposed and everything and hand over files and all that but that was

Aviva (03:14)
Mm-mm. Classic.

Gabriel Gonzalez (03:33)
a six month process of, oh my god, what did I do and what am I getting into?

Aviva (03:37)
It's so funny. We have a joke. We had recently a tenant who we placed in one of our own buildings that we property manage. When you turn on the TV and you see your building on the TV and it's, you know, they were doing money laundry or something. And it's, we laugh about that type of marketing because if you can't cry, you might as well laugh.

Gabriel Gonzalez (03:48)
Oh, it's never good.

You that's about what it is today. Like I told you before coming online, it's, you know, it's one of those days where you're just kind of like, I gotta laugh because if not, I'm going to be curled up in the corner crying. And that's, that's happens more often than not in our business.

Aviva (04:09)
So what does a day of, what does a day in your life look like as a retail leasing champion?

Gabriel Gonzalez (04:15)
A lot of emails. I think this section gets broken down into, first part of the day is reading the news. So as a retail landlord, you kind of want to know what's happening. So today is a great example, Dollar Tree and Family Dollar announced that they're closing a bunch of stores. So you just want to read through that article, go through, are there any store closures? Is there anything that's been announced that I need to be aware of? And that's all the time. Every day there's new news articles. So that's the morning.

From there, it's getting into the emails, going into C-suite stuff, going through corporate kind of emails and making sure budgeting and all that's done where it needs to be. And then from there, you kind of diving into deals. And so we are going through open deals, people to follow up with, we're responding to letters of intent, we're making sure that inspectors are doing what they need to do, that surveys are back where they need to be, answering phone calls, scheduling out for the day.

And that's usually the first half of the day. Second half of the day, I usually reserve it to go, like if I'm doing a lease, like when we finished today, I've got about four leases to go through. And these are, I need to read this and make sure what I'm agreeing to, make sure my legal team is on the same page with me, make sure I'm explaining things to the tenants correctly. And so that's usually the second half is legal reading and just a lot of reading, reading and reading.

Aviva (05:24)
And people say that brokers don't know how to read.

Gabriel Gonzalez (05:26)
Well, you know, I'd argue that they're probably right because I see some of these emails and red lines and I don't think most of them do know how to read.

But that's about the bulk of the day. It's a lot of showings, a lot of phone calls, a lot of emails, a lot of reading from letters of intent, which are the proposals to rent spaces and the actual lease documents themselves.

Aviva (05:43)
Sure. What's the longest lease you've ever seen?

Gabriel Gonzalez (05:45)
in terms of length of lease? I can't mention the specific retailer, but it is a national soft good retailer and their lease is about 150 pages long. They will not use our form and it's take it or leave it. Here's the document, you say yes. Most publicly traded companies leases are pretty lengthy. They're 40, 50 pages long. Once you add all the exhibits and all that, the actual body of the lease is probably 20, but yeah.

Aviva (05:46)
Yeah, pages.

Gabriel Gonzalez (06:07)
They're not short.

Aviva (06:07)
I just get a kick out of, it's so funny.

Gabriel Gonzalez (06:09)
How long are your leases? I want to know, you're a smaller owner. Do you straight to the point, you cut out all the extra?

Aviva (06:16)
No. So our personal leases are 16 pages.

Gabriel Gonzalez (06:19)
That's great.

Aviva (06:20)
But I just did an institutional deal and it was a 96 page lease. So, and I know with retail, yeah, you hit the triple digits and smile.

Gabriel Gonzalez (06:24)
Yeah, 100%.

It's a, there's a lot of legalese, a lot of what if, we're doing a deal right now and this, this prospects attorney, I mean, is arguing every single item to the point where we're having to do so much research, it's reached that point of, all right, let's, we're gonna whittle this down to 10 items. The lease is what it is. And that, that point is a business decision if you want to move forward. And you have to do that sometimes.

I get it if I'm a tenant and I don't know what I'm doing or what I'm signing I want my attorney to fight for me too so you weigh it out.

Aviva (06:56)
Yeah, they talk about dealmaker and deal breaker attorneys and.

Gabriel Gonzalez (07:00)
Hey, this individual is leaning towards deal breaker and we're trying to save it because it's a great operator, great use, it's a great fit for the center and come hell or high water, we're going to find a way to get past this attorney and get the deal done.

Aviva (07:12)
Hey, that's, your landlords are lucky to have you because, whew, that's one way to look at it.

Gabriel Gonzalez (07:17)
I mean, when it's the right deal, it's the right deal. And so you got to fight for it. And whether it's the attorney or a city or zoning or waivers or exclusives, whatever, there's no easy deal. They just don't exist anymore. And so every deal is going to have 15 hurdles and which ones am I jumping over today for this deal? And if it's the right guy or girl, you're going to make it happen.

Aviva (07:28)
Yeah.

Yeah, ain't that the truth. I'm still waiting for the perfect deal. Okay.

Gabriel Gonzalez (07:37)
Hmm. They don't exist. I well, you know what? I get one a year, one a year. I get one where it's asking rent, no landlord work, simple lease negotiation. Fantastic financials. They read it. There's five to 10 comments. We agree to it. We sign it. I get one a year. It's perfect.

Aviva (07:56)
And you earn it. It's not, those are earned, not.

Gabriel Gonzalez (07:59)
Yes, yes they are.