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IPFS News Link • Business/ Commerce

Struggling Retailers Owe $52 Billion In Overdue Rents

• https://www.zerohedge.com, by Tyler Durden

Bloomberg, citing new data via CoStar Group Inc., outlines how restaurants, gyms, and other businesses have accumulated insurmountable rent payments that have been deferred for months. This has resulted in landlords demanding outstanding balances be immediately paid, could drive some retailers into bankruptcy.

"You're going to have big bubbles that are going to be hitting next year or even in the fourth quarter," said Andy Graiser, co-president of A&G Real Estate Partners, an advisory firm. "I'm not sure if they are going to be able to make those payments in addition to their existing rent."

The problem with overdue rents, totaling $52 billion as of November, is that retail sales growth in October slumped and is expected to wane into year-end. 

Furthermore, coronavirus cases are exponentially increasing in almost every US state. Local governments across the country are reimposing strict social distancing measures that will stymie retail sales and increase the threat of a double dip recession. 

CoStar reveals the amount of rent collected from retailers rose from 54% at the end of April to 86% this month. Only 79% of rent due this month for malls was collected.

"It's going to take a period of years, not months, to get through this," said Michael Hirschfeld, vice chairman at JLL, a real estate services firm.


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