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Major retailers are squatting on prime real estate

Boston Properties says tenants such as Ann Taylor won’t pay and won’t leave

Boston Properties president Doug Linde and an Ann Taylor store (Getty)
Boston Properties president Doug Linde and an Ann Taylor store (Getty)

A Nasdaq-listed squatter?

Ann Taylor parent company Ascena Retail Group is among a handful of retailers that refuse to vacate stores after breaking their leases.

That’s causing some major headaches for landlord Boston Properties.

“As long as these tenants refuse to relinquish possession, we have no ability to re-let their space. And we are showing it as occupied and expiring,” Boston Properties president Doug Linde said on the company’s second-quarter earnings call Wednesday morning.

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Linde said the REIT has about 700,000 square feet of retail in its portfolio where the stores are open, but the tenants refuse to pay rent or move out.

“Almost all of it is ‘open’ and those tenants are just not paying,” he said, calling it a frustrating situation. “We don’t have much that we can do other than start the legal process.”

Ascena Group, which also owns brands like Lane Bryant, filed for bankruptcy last week. Authentic Brands Group and its frequent landlord partners Simon Property Group and Brookfield are reportedly interested in buying the company.

Ann Taylor’s corporate offices are located at Boston Properties’ 7 Times Square. Ascena reportedly owes Boston Properties $8.8 million in rent.

Contact Rich Bockmann at rb@therealdeal.com or 908-415-5229

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