Tags: Coronavirus | Financial Markets | mall | owner | taubman | pay | rent

Mall Owner Taubman: Pay Rent Despite Deadly Virus

Mall Owner Taubman: Pay Rent Despite Deadly Virus
(Dreamstime.com)
 

By    |   Sunday, 29 March 2020 06:47 PM

U.S. mall owner Taubman reportedly is telling its tenants that they must pay rent amid the coronavirus pandemic.

It says it still has its own obligations to meet, such as paying lenders on mortgages and paying for utilities, CNBC reported.

“The rental income that we receive from tenants is essential in order to meet these obligations,” Taubman said. “All tenants will be expected to meet their lease obligations.”

The consequences of still having to pay rent on a location that is not in business could deal a huge blow to some retailers that are already strained for cash. CNBC explained.

Landlords, such as Taubman, are also still on the hook, even if their malls are entirely shut down for the time being. Many of them have properties backed by mortgages that must be paid on.

“I have no idea where this is going to shake out,” Vince Tibone, a lead retail analyst at commercial real estate services firm Green Street Advisors, said in an interview. But landlords and tenants will end up “sharing the burden,” in some way, he said.

Meanwhile, Bloomberg explained that the even bigger question is what will come when the crisis recedes. For every kind of property -- not to mention a wide range of human activity -- there will likely be long-lasting changes, said Scott Minerd, chief investment officer at Guggenheim Partners.

Without clarity on those big questions, investors will be reluctant to part with their cash. Investment activity could fall by 45% this year in the U.S., which would be more than the decline following the 9/11 terrorist attacks or the 2008 financial crisis, according to Kiran Raichura, senior property economist at Capital Economics.

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U.S. mall owner Taubman reportedly is telling its tenants that they must pay rent amid the coronavirus pandemic.
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2020-47-29
Sunday, 29 March 2020 06:47 PM
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