Flood of retail evictions expected as courts reopen

Apparel, fitness and theater tenants continue to struggle with payments

National /
Sep.September 01, 2020 10:30 AM
Saks Fifth Avenue at Bal Harbour Shops in Miami (Philip Pessar via Flickr; iStock)

Saks Fifth Avenue at Bal Harbour Shops in Miami (Philip Pessar via Flickr; iStock)

For months, retail landlords have been negotiating lease modification and rent breaks with tenants. But talks that reached a stalemate may soon end in litigation.

A wave of retail evictions among big tenants and small businesses is expected to flood in as courts reopen and eviction moratoriums across the country expire, according to the Wall Street Journal.

In Miami, Whitman Family Development began legal proceedings to evict Saks Fifth Avenue from its Bal Harbour Shops location for missing $1.9 million of rent. The retailer has a ground lease and pays a percentage of his sales as rent.

“We hope and think that the outcome of the lawsuit is that Saks would come to its senses and pay its rent in full,” Matthew Whitman Lazenby, CEO of Whitman Family Development, told the Journal. “If Saks still doesn’t do so, we’ll have a whole host of other options for the space.”

While overall retail rent collections for major chains have improved to nearly 80 percent in July, some sectors, particularly apparel, fitness and theater, continue to struggle with payments, according to a report from Datex Property Solutions.

Local retailers may fall behind even further, especially as rent relief programs begin to expire and tenants face the prospect of making up a backlog of payments.

Although lawyers say they expect proceedings to result in settlements and rent eventually being paid, they are being faced with an abundance of evictions in the works.

“Landlords need to figure out which tenants are going to thrive and make the center better and which ones have been struggling already,” Eric Ruzicka, a partner at Dorsey & Whitney LLP, told the Journal. “If it was a good relationship before coronavirus, it’s a salvageable relationship.” [WSJ] — Sasha Jones

 

Related Articles

arrow_forward_ios
Triple Five Group CEO Don Ghermezian and American Dream Mall in East Rutherford (Getty, World Retail Forum)
Same old story: American Dream mall misses another payment
Same old story: American Dream mall misses another payment
From left: CHIP’s Jay Martin, RSA’s Joseph Strasburg and the Second Circuit Court (Getty, CHIP, RSA)
Second Circuit rules against landlords’ rent law challenge
Second Circuit rules against landlords’ rent law challenge
Cannabis shop, marijuana growing facilities
Cannabis entrepreneurs pay premiums for real estate
Cannabis entrepreneurs pay premiums for real estate
Amazon's Andy Jassy with Amazon Fresh store front (Illustration by The Real Deal with Getty, Google maps)
Amazon scraps plans for big-box store
Amazon scraps plans for big-box store
Armando Montelongo Jr (Armando Montelongo Jr, Getty)
Former “Flip This House” star fails to have fraud claims dropped
Former “Flip This House” star fails to have fraud claims dropped
139 West 46th Street and 15 West 39th Street
Landlord boots one of Times Square’s last music shops
Landlord boots one of Times Square’s last music shops
Kohler Interiors' Rachel Kohler with  21-05 51st Avenue (Loopnet, Getty)
Tile retailer Ann Sacks inks 21K sf lease in Long Island City
Tile retailer Ann Sacks inks 21K sf lease in Long Island City
Vornado's Steve Roth with 1540 Broadway
Vornado writes down portfolio by $600M
Vornado writes down portfolio by $600M
arrow_forward_ios

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

Loading...