Some retailers and malls won’t survive the coronavirus shutdown

The physical retail business was already losing business to e-commerce

Los Angeles /
Mar.March 26, 2020 02:00 PM
Rick Caruso (Credit: Tiffany Rose/Getty Images for Caruso Affiliated)
Rick Caruso (Credit: Tiffany Rose/Getty Images for Caruso Affiliated)

If you thought the outlook on shopping malls couldn’t get much worse, you were wrong.

Stores already hurting before the coronavirus pandemic hit may not survive the mandated closures to re-open. Many stores are expected to skip rent payments on April 1, according to the Los Angeles Times.

The city of L.A. has barred landlords from evicting commercial tenants for missed payments for three months, which could be extended to a year. Vulnerable landlords could find themselves in trouble if they miss mortgage payments.

Whether vulnerable or not, landlords must quickly determine how to weather the storm. Rick Caruso, who owns malls across Southern California, said that he will keep his 1,000 employees on the payroll throughout the shutdown and pledged to support tenants.

He said that government entities and tenant insurance companies need to bear some of the weight.

“It’s a partnership and the risk needs to be shared,” he told the Times. “We certainly are going to do our part.”

But many tenants and landlords could find themselves in conflict. Some tenants want their landlords to waive rent payments while their properties are shuttered.

Andy Nguyen, who owns a chain of ice cream shops, including one in a property owned by Irvine Company, said he was “not sending any checks, period,” after Irvine Co. told tenants they would suspend rent payments for three months, but that tenants would have to eventually cover those payments.

There’s the possibility that the pandemic could further push consumer preferences toward online retail as well. [LAT]Dennis Lynch


Related Articles

arrow_forward_ios
 Gov. Gavin Newsom (Getty, iStock)
Eviction ban deadline knocks and California mulls extension
Eviction ban deadline knocks and California mulls extension
The Sherman Oaks Galleria (Marriott)
Action: Regal Cinemas inks deal at Sherman Oaks Galleria
Action: Regal Cinemas inks deal at Sherman Oaks Galleria
Aerial Shot of a Suburban Street in San Fernando Valley (Getty)
San Fernando Valley home prices top another record in May
San Fernando Valley home prices top another record in May
Los Angeles rents are increasing - but not yet at pre-pandemic levels (Getty)
Rents in LA are climbing from their pandemic lows
Rents in LA are climbing from their pandemic lows
Photo Illustration of California Governor Gavin Newsom (Getty)
State approves $100M to boost marijuana retailers
State approves $100M to boost marijuana retailers
(Getty)
No more tiers — California’s economy fully reopens
No more tiers — California’s economy fully reopens
The Chateau Marmont (Getty) and protest signs (Unite Here Local 11)
Chateau Marmont workers say iconic West Hollywood hotel misused rescue funds
Chateau Marmont workers say iconic West Hollywood hotel misused rescue funds
(Getty, Immersive Van Gogh, iStock)
Former Amoeba Records building, facing demo, will host Immersive Van Gogh exhibit
Former Amoeba Records building, facing demo, will host Immersive Van Gogh exhibit
arrow_forward_ios

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

Loading...