The head of the largest real estate-focused venture capital fund is advocating for a $30 billion government bailout of the retail industry, warning that it is on the brink of systemic collapse.
Brendan Wallace, managing partner and co-founder of Fifth Wall Ventures, has a proposal: Get the five biggest retail landlords in a room with the federal government and work out some immediate solutions — such as standardized rent forbearance — that could save tens of millions of jobs and millions of square feet from going under.
“Right now, the top of the funnel in the retail ecosystem is solvent, revenue-generating, cash-flow generating, rent-paying retailers,” Wallace said in an extensive conversation with TRD’s Hiten Samtani, in which they discussed game plans for landlords and retailers as well as what type of relief the government can provide. “And right now, the assumption that that is a cohort that is going to continue to exist is no longer safe.”
With over $1 billion in assets under management, Fifth Wall has backed many prominent proptech startups, including Industrious, VTS, Opendoor and Wiredscore, as well as digitally native brands such as Allbirds that are pushing into brick-and-mortar. Its investors include retail giants Macerich and Acadia Realty Trust.
Wallace said that now is the time to rethink the relationship between landlords and tenants, arguing that an equity relationship between the parties would result in a healthier retail and retail real estate landscape.
(Stay tuned for more highlights from Brendan and Hiten’s conversation on the future of proptech, sustainability, and more. Also check out more TRD interviews with industry leaders
Don Peebles: A leader’s role “is to look at things in balance”