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As Simon prepares to open area malls, tenants struggle to pay rent and question when customers will return

Lenox Square, Phipps Plaza, The Mall of Georgia and several other popular shopping destinations will open Friday, Simon Property Group confirmed Wednesday.

ATLANTA — As more businesses reopen around Georgia, Simon Property Group announced Wednesday it will open seven malls on Friday. 

The list includes Lenox Square, Phipps Plaza, and The Mall of Georgia. The reopenings are part of 49 total properties Simon is opening across 10 states by Monday, according to the company's website

CNBC first reported the openings on Tuesday after obtaining a leaked memo from the real estate company. 

The mall reopenings come as retailers and businesses nationally struggle to make ends meet and pay rent amidst the COVID-19 pandemic.

"We are seeing negotiations now with literally hundreds of landlords and tenants," said David Marmins who specializes in real estate litigation with Atlanta based law firm Arnall Golden Gregory. "There are many letters going back and forth, saying from a landlord perspective, 'You haven't paid your rent, technically you're in default but we are willing to talk to you,' and tenants on the other side saying, 'Here is what we can do.'"

RELATED: Area malls, including Lenox Square, Phipps and Mall of Georgia plan to reopen on Friday

As tenants struggle to pay rent, mall owners are also struggling with the need to collect rent -- but also the desire to keep their current tenants in place as the economy continues to turn downward. 

"It is hard right now to find a replacement tenant," Marmins said. "So if you're a landlord you want to make sure your tenant can get back on their feet. On the other hand, there are tenants that can afford to be paying their rent, and landlords have obligations to meet as well."

Marmins stressed there is no standard lease for mall tenants and the specifics of negotiations he is involved with or has knowledge of are case by case. 

But as malls were closed for weeks or months around the country and governments announced shelter-in-place orders, Marmins said force majeure, or "act of God," clauses in contracts strengthened cases for tenants not paying rent. 

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"When the state mandates go away and the malls reopen then the tenant has a more difficult argument but still not one that is necessarily going to lose," he added. 

Along with the announcement of opening dozens of malls, Simon Property Group's president released a laundry list of safety measures mall staff, tenants and shoppers will need to follow. 

The list covers social distancing, enhanced sanitizing and disinfecting, wearing personal protective equipment, and health screenings. 

Mall hours are also shortened and the number of shoppers allowed inside will be controlled based on the square footage of each property. 

RELATED: Some Georgia businesses announced they would open, then almost immediately regretted it

"The longer the consumers are afraid to go to stores, or concerned, then more businesses will be permanently affected and that really is uncertain right now. We know that Simon is opening malls, but we don't know how many people are prepared to go to a mall under these circumstances and under the guidelines that are going to be in place."

After weeks of being quarantined at home with time to online shop, there might also be less of a need for people to shop at a mall on Friday, but it will mark one week since Georgia allowed salons, barbershops, bowling alleys, and a list of other businesses to reopen

Andrea Vanderham of Buckhead area salon Human Canvas, reopened her business last week. While talking with 11Alive on Wednesday, Vanderham said her customers quickly returned. 

"Well the business model of a salon, when you close for 32 days you're going to be pretty busy when you come back. So we have seen that. Although we are allowing plenty of time to sanitize and sterilize between each client," she said.

To keep everyone as safe as she could and to ease staff and customer concerns, Vanderham said she made sure to follow state guidelines for cleaning and social distancing. 

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"We are abiding by the one client per stylist rule, we are taking temperatures, nobody has had any issue with that. The questionnaires are being filed out. Everything is being run smoothly," Vanderham said. 

She even went beyond the state guidelines by hiring a company to disinfect her salon, using a product she said continues to work long after it dries. 

For owners still struggling with the decision of when to open, Vanderham said they need to make sure they're prepared to keep everyone safe and also need to do what feels right for them. 

"My loyalty to my clients and their loyalty to me was probably the biggest factor in my decision and the fact that we had what we needed to reopen, so if I can work for them I absolutely will." 

RELATED: Health concerns and protective equipment shortage stopping businesses from opening

Back inside malls Simon will be reopening, Marmins doesn't believe every store will open on Friday. 

"The national tenants I've talked to aren't going to immediately open because Simon is opening their mall and they aren't going to immediately begin paying rent because Simon is opening," he said. "I think this is another phase in negotiations."

1Alive is focusing our news coverage on the facts and not the fear around the virus.  We want to keep you informed about the latest developments while ensuring that we deliver confirmed, factual information. 

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