Check out a Webinar we'll be hosting next Thursday:
In the face of the biggest financial crisis and deepest recession since the Great Depression, retail landlords are increasingly falling behind on mortgage payments or defaulting entirely. Owners are facing great difficulties refinancing debt. One major source of financing—commercial mortgage-backed securities—is no longer available. And the lenders that are still in the market have dramatically tightened underwriting standards.
This is happening at time when other pressures are mounting. Vacancy rates are rising and retail sales are suffering. Faced with all these pressures, more and more properties will end up. Commercial mortgage defaults are at a 17-year high and still rising. The current volume of distressed retail assets on the market at the end of April reached 1,276 properties valued at $30.6 billion, according to Real Capital Analytics—accounting for 38 percent of the total value of distressed assets.
So what happens when the landlord can't pay the mortgage? Tenants might be left in the dark. Retailers may not know if their landlord is working out a solution or if the bank will be the new, permanent owner. If the latter is the case, new questions emerge. Is the bank equipped to conduct day-to-day management of a shopping center? If not, who might the lender turn to helpwith these issues? And while this all playing out, who is communicating with the tenants about what's going to happen next?
This webinar will examine questions including:
* How can you tell if the owner is in trouble?
* How do you protect yourself for the term of your lease term? How does it affect CAM auditing and renewals? How does it affect any reductions you're working on?
* What are a tenant's rights when a landlord defaults? What are they entitled to know? How does an owner defaulting on its mortgage affect leases?
* What lease clauses does a tenant have to be careful about?