Last week's bankruptcy filing by book retailing giant Borders Group is expected to cause trouble for several commercial real estate owners, including the Michigan-based Agree Realty Corp.
Overall, Borders will close more than 200 stores nationwide. Agree Realty owns 14 properties that are leased to Borders, including the book seller's corporate headquarters in Ann Arbor, Mich. Two of the retail locations are not occupied by Borders, but by subtenants under sublease agreements.
Agree takes in annual rental revenue of approximately $7.4 million from these properties, including $1 million in noncash rental revenue from Borders.
The revenue that is received from Borders accounts for approximately 20% of its annual base rental revenue.
"We wish Borders success in their plans to restructure and operate under Chapter 11," said Agree president Joey Agree. "While uncertainty has clouded Borders for the past three years, our organization has anticipated such an event and worked to diversify our portfolio with leading national retailers."
The Farmington Hills, Mich.-based real estate company owns, manages and develops properties that are primarily single-tenant properties leased to major retail tenants and neighborhood community shopping centers. Agree owns and operates a portfolio of 80 properties located in 17 states.
