Thursday, February 15, 2018

How Much Pain Will the Bon-Ton Bankruptcy Cause for the Mall Sector?

NREI Online

Department store chain Bon-Ton Stores is currently working through a plan to close about 42 of its stores, totaling $435.8 million in CMBS exposure. While those are already sobering numbers in this environment, industry analysts say that the picture could be much worse.

Companywide, Bon-Ton store properties are behind about $2 billion in CMBS debt, says Steve Jellinek, a vice president of CMBS research at Morningstar Credit Ratings. The company estimates that about $170.6 million in CMBS debt is tied to properties that will see a significant drop in occupancy and net cash flow as a result of the store closures. That number, however, might rise.. . . more