June 20, 2016
If the retail sector didn’t already have enough to worry about with fickle consumers, online shoppers and a less-than steady economy, data from Bank of America Merrill Lynch reveals a new concern. Analysts say there’s roughly $47.5 billion of loans backed by retail properties set to mature over the next 18 months.
When mall owners factor in the tighter CMBS market, the sector sets up for a rough stretch ahead.
Refinancing or negotiating loan extensions for assets will be troublesome. That’s because lenders are pulling back as a result of unease about how shopping centers can compete with online shopping, which is accelerating the separation of winners and losers.
Expect to see continued bleak earnings forecasts, more bankruptcy filings, and hard hits ahead for dated malls or tertiary markets.