Skip to main content

Market Overview

Mall Owner Taubman To Tenants: Pay Your Rent

Share:
Mall Owner Taubman To Tenants: Pay Your Rent

U.S. mall owner Taubman Centers, Inc. (NYSE: TCO) is warning tenants against skipping rent payments, CNBC reported Sunday.

Taubman Says Rent 'Essential'

The real estate investment trust wrote in a March 25 memo obtained by CNBC that the rental income it receives from tenants is "essential" for it to meet its own financial obligations, like paying lenders on mortgages and utility expenses.

The Taubman memo reportedly said "all tenants will be expected" to stay true to their original lease obligations, despite financial difficulties related to the coronavirus.

So far, restaurant chain Cheesecake Factory Inc (NASDAQ: CAKE) is the most notable national mall tenant to confirm it won't pay rent in April, although the company said it is in various stages of discussions with its landlords.

RBC Capital Markets and Costar Realty found just one Cheesecake Factory located within a Taubman property.

Taubman Sale Underway 

Taubman ultimately bears the financial responsibility of managing its malls, even if they are entirely shut down. But landlords and tenants will ultimately end up "sharing the burden" in some form, Green Street Advisors retail analyst Vince Tibone told CNBC.

In February, Simon Property Group (NYSE: SPGannounced the acquisition of 80% of Taubman in a $3.6-billion deal that's expected to close this year. 

What's Next For Taubman

Taubman is "attempting to navigate" through the complex landscape the "best way we can" and plans on "being as flexible as we can," a company spokeswoman told CNBC.

So far, "most" tenants understand the status quo, she said, although the company acknowledges the situation is "much harder" for smaller and less-established occupants that may only have a presence in one mall.

Taubman shares were down 0.73% at $46.05 at the time of publication Monday, while Simon Property shares were down 4.37% at $55.63. 

Related Links:

Carly Fiorina Blasts Corporate Bailout Funding In $2T Coronavirus Relief Bill

GrubHub CEO: Independent Restaurants Are 'Really Hurting'

Photo by ChildofMidnight via Wikimedia

 

Related Articles (TCO)

View Comments and Join the Discussion!

Posted-In: cheesecake factory Coronavirus Covid-19 mallsNews REIT Media Real Estate Best of Benzinga

Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com