Retail landlords still suing over skipped rent

Apr.April 19, 2021 07:30 AM

(Getty images)

While businesses have been suing their insurers, commercial landlords have also been filing claims against tenants that have skipped rent, citing similar coronavirus losses. While no database tracks these cases, several recent rulings have gone against tenants.

Movie theaters — one of the sectors the pandemic has pushed to the brink — have found little solace in the courts.

In early April, a Regal Cinemas theater near Boca Raton, Florida, was ordered to pay $886,000 to landlord Terranova for 10 months of missed rent.

In his decision, Circuit Judge G. Joseph Curley said the “court was sympathetic and mindful of the difficult circumstances brick-and-mortar businesses have endured.” But he said the law gave him no wiggle room. It has been a common refrain among judges.

Retail stores have fared no better.

Gap, which has refused to pay rent at many of its locations, including at Brookfield Property Partners’ malls, in March lost its federal lawsuit against another landlord, Ponte Gadea. Last year, Gap contended it didn’t have to pay rent at its East 59th Street location in Manhattan because of the government-imposed shutdown, an argument it has used at numerous stores nationwide during the pandemic.

Regal Cinemas and Gap lost despite force majeure clauses in their leases that generally provide for unforeseen circumstances that are outside a business’ control.

In ruling against Gap, the federal judge noted that the retailer still operated stores for part of last year, both as online fulfillment centers and for curbside pickup.


Related Articles

arrow_forward_ios
Clockwise from top left: 312 West 34th Street, 61 North 9th Street, 639 Classon Avenue, and One Fulton Square (Credit: Google Maps)
These were the top 10 NYC retail leases in July
These were the top 10 NYC retail leases in July
From top, clockwise: Cushman & Wakefield's Joanne Podell, Showfields' Amir Zwickel, Appear Here's Josh Yentob, Brookfield Properties's Mark Kostic (Credit: Getty, LinkedIn)
When it comes to retail, “real estate in New York is fundamentally broken”
When it comes to retail, “real estate in New York is fundamentally broken”
A photo illustration of Fifth Avenue, Grand Central and SoHo in New York City (iStock)
Manhattan retail rents tick up as recovery slogs along
Manhattan retail rents tick up as recovery slogs along
1552-1560 Broadway and Wharton Properties’ Jeff Sutton (Google Maps)
Investor claims Jeff Sutton cheated him out of millions on Times Square deal
Investor claims Jeff Sutton cheated him out of millions on Times Square deal
Adam Leitman Bailey, Y. David Scharf, and Miki Naftali with 215 West 84th Street (Adam Leitman Bailey, Morrison Cohen, Getty)
Naftali lays out project as holdout tenant plays new card
Naftali lays out project as holdout tenant plays new card
Midwood’s John Usdan and 210 Douglass Street (Midwood)
Landlord in rush for 421a booted Gowanus business: lawsuit
Landlord in rush for 421a booted Gowanus business: lawsuit
Patrick Nelson of Nelson Partners Student Housing and the Skyloft Austin (Nelson Partners Student Housing, STG Design, iStock)
Languishing student housing firm on the hook for $50M
Languishing student housing firm on the hook for $50M
DoorDash's Tony Xu with 51 Eads Street and 6133 Jericho Turnpike
Startup plans LI convenience stores that shoppers can’t enter
Startup plans LI convenience stores that shoppers can’t enter
arrow_forward_ios

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

Loading...