Busted retailers use bankruptcy to break leases by the thousands
[{"id": "g0lzxvn", "text": "In other words, shit is about to hit the fan.", "replies": [{"id": "g0m2pws", "text": "As a commercial landlord who has dealt with this before, tenants will sometimes just leave in the middle of the night, which isn't half as bad as bankruptcy in the courts. Tenant Bankruptcy is worse because that takes time to for the tenant to put a proposal together etc, in the mean time they are protected and can not evict / find or enter into an agreement with another tenant.\n\nIt's worse than vacancy because for a few months it is not only vacant but also off the market.\n\nLandlords are going to require better security from these brands in the future, and will be less likely to offer inducements, and more likely to change the use of their land. Commercial may get redeveloped to residential etc.\n\nMalls have already been closing for some time.", "replies": [{"id": "g0m3dcy", "text": "&gt;Landlords are going to require better security from these brands in the future, and will be less likely to offer inducements\n\nHmm, something tells me that LL's will have little bargaining power. There is far too much supply out there, and too little demand. It's a tenants market", "replies": [{"id": "g0mlrv2", "text": "They will redevelop to a different use if possible as well.\n\nI'm in Canada, we have far far less inventory as in SQ/ capita than in the US, and will be seeking more security or lower inducements", "replies": [{"id": "g0mpl1v", "text": "Redevelopment takes capital, time (really just more capital), and expertise.  Most retail operators will sell while weeping about their halcyon days.", "replies": [{"id": "g0muwj7", "text": "Yes, they can sell it even payment with someone with more expertise and capital", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}, {"id": "g0qif68", "text": "Agreed.  In fact, its time for tenants to start taking back rights.  Commercial, in my opinion, take a heck of a lot greater risk than landlords.", "replies": [], "depth": 4}], "depth": 3}, {"id": "g0n2wkr", "text": "&gt; that takes time to for the tenant to put a proposal together\n\nThat's going to fail anyways.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "g0modzz", "text": "This is the large-scale brick and mortar collapse that was supposed to be brought on by the expansion of e-commerce.", "replies": [{"id": "g0n2lu2", "text": "I think that lots of local business can now offer same day delivery, pickup and basic e-commerce.\n\nMaybe there delay was long enough to save many of these retailers", "replies": [], "depth": 2}], "depth": 1}, {"id": "g0nasrd", "text": "Question: what guaranties do you guys use on your properties in the lease? \n\nIn my experience, we've had tenants put personal guaranties (and that seems to be reassuring enough for my bosses whenever we sign a new lease, if they think the guy has enough money in the bank) but two of my last two big leases were defaulted and we couldn't even find the guy to serve even though he signed a garanty. Another guy saw that he was going to go into receivership so he simply went into the company bank account and withdrew everything so we got nothing even after spending hundreds of thousands in legal fees. Apparently in both cases we were SOL....  Is there a better way to protect ourselves?", "replies": [{"id": "g0nn5eq", "text": "Line of credit, large deposit, third party agreements perhaps.", "replies": [], "depth": 2}, {"id": "g11j1my", "text": "Cash-secured standby letter of credit for single or anchor tenants", "replies": [], "depth": 2}], "depth": 1}]