Simon Property Group sets the lawyers on tenants not paying rent
Lawsuits filed against Eddie Bauer, Brooks Brothers, Gap
Simon Property Group has kept its promise to sue mall tenants who aren’t paying their rent.
On Tuesday, the country’s biggest retail real estate investment trust filed a lawsuit against Eddie Bauer, seeking to recover $6.2 million in missed rent payments. The outdoor clothing store chain has not paid rent since April, according to records filed in federal court.
Last month, Simon Property Group filed a similar lawsuit against Brooks Brothers seeking $8.7 million of missed rent, according to records found in Marion County Superior Court. Earlier this month, the 200-year-old clothing chain announced that it has filed for bankruptcy.
Simon Property Group CEO David Simon has made no attempt to conceal the company’s intentions in filing such suits, regardless of the coronavirus pandemic, which has shuttered stores and sent retailers into a spiral.
“The bottom line is that we do have a contract, and we do expect to get paid,” Simon said in a May earnings call.
However, those lawsuits may be nothing compared to the bill the Gap is facing. In early June, the REIT sued the Gap for more than $65.9 million in missed rent. The Gap leases more than 400 properties from Simon Property Group and is its biggest in-line (non-anchor) tenant in terms of rent.
Simon Property Group is among the many retail landlords facing massive rent nonpayment issues, even though the company’s own mortgage payments are due.
In June, national chain retailers paid about 68 percent of rent collections, according to a report from Datex Property Solutions. While that number has slowly been on the rise, many fear states once again shutting down due to spikes in coronavirus cases could be disastrous to retailers and their landlords moving forward.
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