What can be viewed as inflexibility by landlords, Perales said, may be a matter of limited financial options. "Tenants need to see the landlords' perspective," he said, "and landlords need to see their tenants' perspective in order to work together."
For those landlords who can and will be flexible, there are several ways to ease a restaurant tenant's burden. First is abatement, in which the landlord agrees to waive rent entirely for several months. "Just forgiving rent is very rare," Perales said.
Then there's partial abatement, in which months of unpaid rent are added to the end of the lease, extending the lease and keeping alive the hope that the money will be paid eventually. A third option is renegotiating the terms of the lease, often setting the rent as a percentage of the restaurant's gross sales.
"If you can get to that deal, when the landlord is willing to do it, it's the best option, really," Perales said. "As sales go up, landlords make more money, but if they go down, it's nice to say the rent is whatever percentage of sales. Sometimes it's a pure percentage, or sometimes the landlord will say, 'I can do that, but at a minimum, you've got to cover my real estate taxes and operating expenses.'"
Albert M. Friedman is chairman and CEO of Friedman Properties, which owns and manages more than 50 properties, totaling some 5 million square feet, most of it in the River North area. Chicago magazine once called him the "mayor of River North."
"And I've apologized to every mayor thereafter," Friedman said.
Friedman likened the current restaurant landscape to an episode of "The Twilight Zone," except to note that it's really happening.
"You have the pandemic on one hand, the economy significantly impacted, and then civil unrest," he said. "It's a perfect storm. The smartest, most hard-working person couldn't possibly be prepared for all this. You know about counting sheep? The other night, I started counting (restaurant clients), and it was 60. Out of necessity, we had to come up with a solution."
"One size doesn't fit all," Friedman said. "A mom-and-pop is different than a national tenant. Lunch is probably the toughest sell across the board - that's not coming back until the office workers do. In the theater district, what do you expect to happen down there?
"So we worked on a program where we tried to understand each exact individual case," he said. "What was their need? Where was their soft spot? We have two full-time people documenting, analyzing, to understand each situation."