Banana Republic sues to stay in Rockefeller Center

Retailer says “frustration of purpose” frees it from $791,000 rent

TRD New York /
Aug.August 03, 2020 07:00 AM
Banana Republic CEO Mark Breitbard and Tishman Speyer CEO Rob Speyer (Breitbard by Neilson Barnard/Getty Images for GQ; Speyer by Drew Angerer/Getty Images; Banana Republic via <a href="https://www.google.com/maps/@40.7587282,-73.977071,3a,75y,294.63h,89.43t/data=!3m6!1e1!3m4!1snqmQYZoCmhBHaYTYn4xfNg!2e0!7i16384!8i8192?hl=en" target="_blank" rel="noopener">Google Maps</a>)

Banana Republic CEO Mark Breitbard and Tishman Speyer CEO Rob Speyer (Breitbard by Neilson Barnard/Getty Images for GQ; Speyer by Drew Angerer/Getty Images; Banana Republic via Google Maps)

On an average day, Rockefeller Center draws 470,000 visitors. It’s been five months since its last average day, though.

Now Banana Republic is arguing that the purpose of its lease at the famous site has been frustrated, freeing it from the obligation to pay rent.

The national clothing retailer, housed within the International Building, is at risk for a lease termination for skipping out on $791,600 a month in rent. Now the retailer is suing landlord Tishman Speyer to remain on the premises.

In a statement, a representative for Gap, Banana Republic’s parent company, reinforced that the pandemic is placing restrictions on stores that no one foresaw when leases were signed.

“We remain committed to working with our landlords on mutually agreeable solutions and fair rent terms, just as our industry and government partners have sat with us in good faith to shape the post-Covid business landscape,” the statement said.

Tishman Speyer did not respond to requests for comment.

The lawsuit is the latest of many legal spats between Gap and landlords over rent during the pandemic.

Earlier this month, five of Gap’s chains — Gap, Athleta, Banana Republic, Old Navy and Janie & Jack — sued Brookfield Property Partners affiliates, stating that coronavirus restrictions made the core purpose of their leases “illegal, impossible, and impracticable.”

The lawsuits are emblematic of the Covid era, which has left commercial landlords and tenants in uncharted territory. Thousands are renegotiating leases or grappling in court over whether force majeure or frustration of purpose are viable excuses for not paying rent.

Some retailers are aiming to get the same treatment that a restaurateur did in Chicago, where a federal bankruptcy judge reduced Giglio’s State Street Tavern’s rent to just 25 percent from April to June after determining that the circumstances fulfill the criteria for force majeure.

Still, none of the major disputes have been resolved, and lawyers say that a precedent has yet to be set on the issue.

Contact Sasha Jones at [email protected]


Related Articles

arrow_forward_ios
Secretary of the Treasury Steven Mnuchin and Administrator of the Small Business Administration Jovita Carranza (Getty; iStock)

PPP loan forgiveness to begin within the coming week: SBA

PPP loan forgiveness to begin within the coming week: SBA
Bed Bath & Beyond CEO Mark Tritton (Getty)

Pandemic profits buoy Bed Bath & Beyond

Pandemic profits buoy Bed Bath & Beyond
(iStock)

ACLU accuses Missouri courts of violating federal eviction ban

ACLU accuses Missouri courts of violating federal eviction ban
Mallspats: Unibail-Rodamco sues LA County over retail closures

Mallspats: Unibail-Rodamco sues LA County over retail closures

Mallspats: Unibail-Rodamco sues LA County over retail closures
Retail bankruptcies are on pace to surpass those filed in 2010, while store closings have already passed those from 2019, according to a report (Getty)

Retail bankruptcies on pace to rival 2010: report

Retail bankruptcies on pace to rival 2010: report
(Getty)

“On the verge of a tragedy:” The stark numbers of a pandemic-hit NYC

“On the verge of a tragedy:” The stark numbers of a pandemic-hit NYC
Landlord groups say limits on what landlords can be reimbursed for renovations has caused vacancy to rise. (Illustration by The Real Deal)

From unthinkable to reality: Cheap NYC apartments sit vacant

From unthinkable to reality: Cheap NYC apartments sit vacant
Starwood's Barry Sternlicht and Pacific Retail's Steve Plenge with Parkway Plaza mall in San Diego and the Plaza West Covina mall in Los Angeles (Getty, Starwood, Pacific Retail)

Last bidder standing has big plans for Starwood’s troubled mall portfolio. But first, creditors must sign off

Last bidder standing has big plans for Starwood’s troubled mall portfolio. But first, creditors must sign off
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...