In the mall business, it appears deep pockets beget survival. Mall operators are pouring millions into rejuvenating the design and amenity offerings of their properties to entice both visitors and, in turn, new retail tenants. The bet is that new tenants, who in many cases would fill dead big-box space, will pay much higher lease rates than did legacy anchors. But the wager is heavy. Landlords’ capital expenditures are rising at a faster rate than retail property income, and smaller mall owners may not be able to keep up. (Via Bloomberg)
True Religion has filed for Chapter 11 bankruptcy protection, but will be closing 27 locations. Six of those stores will be in New York City. TowerBrook Capital Partners, which owns the denim brand, says the reorganization will reduce the retailer’s debt load by $350M. (Via CBS News)
The 100 REIT respondents to BDO’s 2017 BDO RiskFactor Report for REITs unanimously noted liquidity, financing and access to capital as risks to their businesses. Last year, 96% of respondents felt that way. REITs said they are also watching tax reform and what multiple interest rate hikes will mean for deal pricing. “A potential slowdown in the market, combined with concerns of rising interest rates, a lack of continued access to capital, and disruptions in several REIT sectors, has added to the uncertainty. For REITs navigating the current economic environment, there is a real possibility this confluence of factors may result in slower growth,” says Stuart Eisenberg, partner at BDO’s Real Estate and Construction practice. (Via World Property Journal)
More News to Note:
June Brings Delinquency Jump for Securitized Commercial Loans
Seven Urban MegaDevelopments Underway in the U.S.
Softening Commercial Markets Take Toll on Trump Office Buildings
The Relationship Between Neighborhood Crime Rates and Store Closures