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Retail woes mount for Simon and Macerich

(Credit: Simon Property Group)

Simon Property Group is trying to open many malls as soon as it can, but some local politicians are stalling efforts to get many of them back in business. In the past two weeks, the REIT had to backpedal on plans for reopening some of its properties in Indiana and New York, WSJ reported. Simon noted that some of its key retail tenants were unable to pay their monthly rent amid the lockdown, but didn’t disclose details.

  • Macerich’s abysmal rent collectionMacerich announced on Tuesday’s earnings call that it had “collected about 26 percent of rent” from tenants at the 47 shopping centers the retail REIT owns throughout the country.
  • Heard on the Street: Macerich CEO Tom O’Hern: As many retailers ask for rent deferrals, the company continues to have conversations with lenders to “defer payments so the outflows match the inflows”. More than 90 percent of the Macerich’s revenue comes from leases, per The Real Deal.
  • Update on Neiman Marcus bankruptcyMudrick Capital Management LP, one of Neiman’s creditors asked the company’s independent directors to explore a combination with rival department store chain Saks Fifth Avenue, challenging its plan to reorganize under bankruptcy protection. Mudrick suggests that combining the two luxury retailers would create between $2.8 billion and $4.7 billion of value, which could ultimately be achieved by Neiman using bankruptcy proceedings to permanently close at least 22 stores in nearby or overlapping locations to its rival, Reuters noted. [WSJ+TRD+Reuters]

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