Thursday, April 2, 2020

What Should Retail Borrowers Keep in Mind in Today’s Environment?

NREI
For the past few years, there has been a premium put on grocery-anchored retail transactions. These grocery-anchored retail transactions are holding up much better than non-grocery anchored properties in the COVID-19 environment. Many of our retail-focused clients who have grocery-anchored assets are going to be receiving percentage rents this year from their tenants. The inline tenants may not be able to make rent payments, but as long as the grocery anchor remains open and shoppers can secure supplies on-site or through a reasonable home delivery timeframe, this retail asset will generally perform.

Because we are in a totally different climate compared to the 2007 recession—a medical crisis causing an economic shock, not a financial crisis, lenders are going to be more focused on non-grocery-anchored asset performance. . . . more