Retailers

Kind Lending has big plans to grow its retail channel and is signaling this by putting industry veteran Tammy Richards in charge of the operations.

The delinquency rate on regional mall commercial mortgage-backed securities was 22.9% in February, the highest of any real estate category, according to Moody’s

The sponsor has refrained from multi-borrower deals since March 2020, but has pooled together 28 loan participations from 40 properties – including notable concentrations in retail and lodging.

Thirty-one of 39 shopping malls linked to a key commercial real estate credit derivatives index are currently impaired.

The largest U.S. shopping center became delinquent on its debt last year after its owner Triple Five Group began skipping mortgage payments, citing hardships from the COVID-19 pandemic.

Reports indicate distressed owners would rather surrender their hotel or retail properties instead of negotiate workouts on delinquent loans as the pandemic spread carries on.

As revenue-starved retailers fall further behind on rent payments, landlords' cash flow will be strained, and defaults on commercial real estate loans could rise.

Fitch assumes a significant spike in defaults over the next few months, as well as declining new issuance volume during the second and third quarters of 2020, fewer maturing loans and fewer resolutions by special servicers.

GameStop's plan to shutter up to 200 stores could adversely affect commercial mortgage-backed securities loans with a combined allocated property balance of almost $42 million, according to Morningstar Credit Ratings.

Mall landlords accustomed to offering rent reductions to ailing retailers are mulling a new strategy to forestall the industry's collapse: positioning themselves as lenders to tenants struggling to stay afloat.