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Not that I’ve reviewed any numbers, but this seems pretty smart on the face of it. Strip our all the old debt in BK, keep the stores open that performed best in the last few years (and presumably all of the ones in Simon’s malls which avoids vacancies), and dump the lease obligations on the under-performing stores. When things get back to normal post-COVID, this is a venerable brand that can thrive with a certain segment of the workforce.
Yes great for Simon. What about those stores located in properties not owned by Simon. Would you like to suck up the loss of someone occupying space and not paying rent until you get them out?
Rhea, not sure why you’re upset with me. I was just commenting on the merits of Simon buying the assets of BB out of BK. It seems like this is a half-decent long-term play for Simon. They’ve taken their lumps in FFO and stock price like all REITs. Many tenants, and thus landlords, everywhere are getting creamed. I understand that. It’s an unfortunate situation for all concerned, yet vacancies are one of the risks of owning rental properties. I feel bad for residential landlords who may have tenants that are barred from being evicted who must still pay the mortgage payment to the bank – yet I also understand that public policy is not well-served by those families who were thrown out of work also getting thrown out of their homes. It’s not good anywhere for anyone. At least a property owner can nudge a bank to relax their obligations since what does a bank want to do with, say, a strip mall with half the tenants unable to pay rent and no willing new tenants on the horizon?