David E. Weiss — DDR Corp

Evolving at the speed of retail
Written by: 
Molly Shaw
Produced by: 
Blake Davis

Retail is one of the fastest-moving, rapidly-changing sectors of the American economy. As consumer buying habits change, retailers must adapt their business models to keep pace with ever-evolving demand. For many retailers this comes down to changing up their physical space, whether that includes growing into a new location, adding more distribution space to support online sales, or mixing up the store layout. The ability to be nimble is critical to their ongoing success and capturing more sales.

DDR Corp., a nationwide real estate investment trust, leases retail space to some of the country’s largest and most recognizable retailers. Headquartered in Cleveland, DDR owns and manages 350 retail properties, representing some 113 million square feet of leasable space across the U.S. and Puerto Rico.

David E. Weiss — DDR Corp

In essence, DDR has become one of the largest landlords for some of today’s most successful retailers and for the last 50-plus years in business, DDR has positioned itself as one of the preferred landlords in the massive retail real estate world. Unlike some corporate landlords, who are absent except to collect rent, DDR tries to see the world through the eyes of its tenants, understanding their business challenges.

Never a dull moment

At the core of DDR is an in-house legal team that helps to strike a balance between company goals and tenant success. This integral department is spearheaded by David E. Weiss, executive vice president and general counsel, a position he assumed in 2003. Weiss manages the legal aspects of the company’s daily operations, including real estate, acquisitions, dispositions, leasing, commercial financing transactions, insurance and risk management and more, also serving as a key business adviser.

Weiss studied political science before attending The Ohio State University’s Mortiz College of Law and has private firm experience as a former partner with the law firm of McDonald, Hopkins Co., LPA, in Cleveland. He says the ability to problem solve in the real estate world is what attracted him to DDR. “Unlike some areas of law, this is an area where you can get your hands dirty — literally and figuratively — and really see the fruits of your labor,” he says. “We’re building something tangible and we get to see the end result. Not every area of the practice of law gives you that kind of satisfaction and every project and tenant lease is truly unique. There’s never a dull moment.”

His passion for the real estate and development process, as well as an eagerness to work with all aspects of DDR’s business allows Weiss to lead the in-house legal team as the company evolves and works to anticipate the changing needs of its tenants.

Getting to know the retail tenant

Weiss says DDR’s success comes from knowing its customer base inside and out. “There are landlords out there that own all property types — residential, industrial, office — the market is fractured in terms of real estate ownership,” says Weiss. “What sets us apart is that we focus on retail and not only that, but a specific subsector of retail: large scale, open-air, value-oriented shopping centers. In this specific subset of the retail market, we have established long-term relationships with our tenants. Our business is all about our tenants. We are only successful if our tenants are successful.”

With this partnership philosophy at the forefront of business, DDR has transformed its portfolio in recent years, moving from approximately 750 properties in a mix of markets to now 350 in major metropolitan areas. This shift sounds like a considerable downsize, but the reality is DDR is now managing fewer but larger properties for national retail brands in key markets. “Now, our typical property is 300,000-plus square feet in dense markets with strong demographics,” says Weiss. “For many of our tenants, we are their single largest landlord for their locations across the country; tenants that have 10, 15 and even 20 locations or more.”

“This makes what we’re doing very different from a landlord who has a single lease to negotiate,” continues Weiss. “For us, it’s not a one-off transaction. We view the relationship differently because we manage multiple locations and are invested in these long-term relationships.”

The transformation of DDR’s portfolio has increased the company’s flexibility as a landlord. “We can be more nimble with respect to what our tenant needs. If they need more or less space, a more efficient/green-friendly space, more distribution area, or an altered space configured for different product lines — whatever the need, we can accommodate across a broader range of tenant needs,” says Weiss.

Adapting to a fast-paced channel

Staying flexible is a key part of DDR’s partnership and commitment to its tenants. “Retail is a fast-paced channel, we must stay abreast with new technology and industry trends to help understand our tenants’ business challenges,” says Weiss.

DDR recognizes the single biggest change for retailers over the last decade is the emergence and growth of e-commerce. “E-commerce obviously has had a large impact on the retail industry, but there is a lot of misunderstanding about what is going on until you talk with retailers,” says Weiss. “The headline you often see is ‘The Death of Brick and Mortar’ retail; shopping centers are going to go away. The reality is nothing could be further from the truth. When you talk to most of our tenants [retailers] today, they say the thing you do for long-term viability is to be ‘omni-channel,’ meaning what customers really do is utilize a combination of online and in-store shopping, depending on what they’re buying.”

As tenants try to leverage their store base as a distribution network and reconfigure space to meet e-commerce demand, Weiss and the legal team at DDR are busy sitting down with tenants to understand their specific needs for sales floor space and distribution/warehouse space. “The key to success online is having inventory control, managing shipping challenges and controlling delivery expense,” says Weiss. “Retailers are not necessarily downsizing their spaces, but store configurations are changing.”

This means DDR is drafting and negotiating unique lease agreements all across the board. “They’re looking for things that range from signage, improved access points, to flexibility in supporting distribution needs such as loading dock space,” says Weiss. “What we try to do in the legal department is to determine how to best achieve our tenants’ goals in a way that’s consistent with our goals. In most cases, those are win-win situations, but it often takes some creativity. It’s not just ‘I’ll take this space,’ and ‘Here’s your standard lease.’ It’s a very case-by-case scenario.”

The same applies to rent; there is no one size fits all dollar amount. “There is a lot of ongoing discussion about online sales and the ship-to-store and pickup in-store component and how this impacts the calculation of store sales. We’re having these important discussions with tenants — and their approaches differ — and so there has yet to be an industrywide consensus on reporting these metrics,” says Weiss.

In negotiating these agreements, Weiss’ legal team works with tenants’ in-house or external counsel, many of which DDR has long standing relationships with. “In many cases, we have what we refer to as ‘platform leases’ or leases tailored specifically to a tenant’s needs,” says Weiss. “But these leasing are living documents which are constantly evolving as tenants come to us and ask to do something different with their space.”

Accelerating timelines

Even with a 40 person in-house legal team, managing and reviewing the lease terms of hundreds of large-scale retail operations is a huge task, one that DDR has fast-tracked by embracing technology. “We have accelerated the leasing process, from the letter of intent to the actual lease document dramatically by creating our own online data management system,” says Weiss. “When our people are out in the field, they can pull up a wide range of data on our tenants and have everything from their average lease space, base rent, and overall economic structures to site configurations right at their fingertips.”

“A lot of this has been spearheaded through collaboration between the legal, accounting and technology departments, and this is the kind of up-to-the-minute information that drives deals,” adds Weiss.

Legal-business crossover

Operating in such a fluid market, Weiss looks to find legal professionals that are not just legal experts, but also have the business acumen and foresight to make sound legal decisions while never losing sight of the long-term business goals.

“We can get good legal advice from lots of sources, both internally and externally, but because of our size and scale — there’s nobody leasing as much space or doing as many deals as we are in this subsector — we need lawyers with sound, practical judgment and strong business acumen,” stresses Weiss.

“We need these qualities because our business is changing so rapidly. We constantly are looking ahead and asking, ‘Where are the markets our tenants are going to? Where are the markets we want to be in? This is part of the portfolio transformation. Our focus is to own and manage great real estate in great markets,” says Weiss.

This combined legal expertise and retail business awareness is also critical as Weiss says there is a true legal-business crossover at DDR. “Very little happens without the legal department touching it,” he says. “We’re involved in so much more than just the lease negotiating process; legal also plays a role in real estate, tax, employee benefits and HR, risk management, finance, securities, mergers and acquisitions and more. It is very satisfying to know that our business team values our involvement and counsel.”

Weiss has also worked to create an entrepreneurial philosophy in the legal department, contrary to the typical label on most legal departments. “A colleague once told me that their legal department was known as ‘the department of no,’” he says. “We are very much the opposite of that. We work to partner with all aspects of the business and approach situations from the perspective of ‘how do we best achieve our objectives with the least risk?’ rather than a flat-out ‘yes’ or ‘no.’”

Having been with DDR for 17 years — and practicing law for more than 30, Weiss has enjoyed the evolution of his role. “I think I have the best job in the world,” he says. “My days are so varied. My to-do list gets longer everyday but the real excitement of being a general counsel is the variety in the work. The legal world has become so focused on specialists — who are no doubt needed — but my role affords me the luxury of a high-level and wide-ranging view of all legal aspects of the business.”

Leading with integrity

After many years advising on the full gamut of legal matters, Weiss has found that his success is built upon a foundation based on the value of personal integrity. “People look to the general counsel for a sense of fairness, honesty, transparency and with the full confidence that anything – no matter how difficult or sensitive – can and will be addressed appropriately,” he says. “It comes down to your word, your reputation and the ability to truly lead by example. People know they can come to me with anything and I will have an open mind and a solution-oriented approach, but one grounded in unwavering truthfulness and integrity.”

Outside of his role as executive vice president and general counsel, Weiss has a hand in many community-driven organizations. “I’m a big believer in giving back and so is DDR as a company, whether that is financial support or on the service side such as volunteering at a Habitat for Humanity project or working with a local food bank. This is a big part of our culture,” says Weiss, who, among a number of civic and charitable commitments, is in-coming board chair of The Centers for Families and Children, a social services agency with $55 million in annual revenues; a board member of The City Club of Cleveland, one of the nation’s longest operating civic organizations promoting free speech; a longtime member of his local community’s Planning Commission, as well as a member of various legal and industry associations.

Weiss says that at the end of the day leasable space is just that — space, but it is also home for the company’s retail tenants and the proper use and terms of that space can dramatically impact their business. “While well-positioned and well-located property will always be critical, it’s the people and culture of a company that makes or breaks a business and where you really make a mark,” he says.

By better understanding the challenges of the retail market and tenants’ business objectives, David E. Weiss and the legal department at DDR Corp. make for more than just a good landlord, but also a partner in achieving shared success.

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