Flood of retail evictions expected as courts reopen

Apparel, fitness and theater tenants continue to struggle with payments

TRD 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
Sonder CEO Francis Davidson and Nathan Berman with 20 Broad Street (Images via CityRealty; Twitter)

Sonder accuses Metro Loft of hiding legionella at 20 Broad

Sonder accuses Metro Loft of hiding legionella at 20 Broad
NYC Hospitality Alliance’s Andrew Rigie and Mayor de Blasio (Hospitality Alliance; Getty; iStock)

City can’t afford to bail out restaurants: de Blasio

City can’t afford to bail out restaurants: de Blasio
305 East 61st Street and Jason Carter of Carter Management Corp. (Google Maps; Carter Management Corp.)

Upper East Side condo conversion fetches $51M at auction

Upper East Side condo conversion fetches $51M at auction
From left: Michael Fuchs, Aby Rosen, Brandon Singer and Michael Cody (Getty, iStock)

Aby Rosen, Michael Fuchs back new retail brokerage

Aby Rosen, Michael Fuchs back new retail brokerage
Matt Salem, KKR head of real-estate credit (Getty; KKR)

Hotel and retail mortgages dragging down recovery

Hotel and retail mortgages dragging down recovery
New York City restaurants have struggled to make rent throughout the pandemic but August marked a new high. Andrew Rigie of the NYC Hospitality Alliance (Getty; Institute of Culinary Education)

Rent struggles for NYC restaurants now worse than ever

Rent struggles for NYC restaurants now worse than ever
(iStock)

Movie theaters might not come back after all

Movie theaters might not come back after all
Judge Janet DiFiore and Tax Equity Now’s policy director Martha Stark Credit: NY Courts and NYU Wagner)

State’s highest court dismisses property tax reform appeal

State’s highest court dismisses property tax reform appeal
arrow_forward_ios

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

Loading...