by Calculated Risk on 11/28/2008 10:35:00 AM
Friday, November 28, 2008
WSJ: Retail Lease Obligations
From the WSJ: More Risks in Store for Retailers
Friday could be black for retailers in more ways than one. Traditionally it is the day that retailers start to break even for the year. This time it could be the moment when some accept reality and start making plans to scale back.This is definitely not a strong market - and trying to downsize could be costly for some retailers. Between a rock and a hard place ... maybe Black Friday will bail them out.
For those that do, there is a serious concern: exposure to long store leases.
...
In strong markets, leases can be sold to new occupants. When replacement tenants are scarce, however, landlords often extract a hefty fee to break a lease.