It’s no secret that an unprecedented implosion in US commercial real estate is underway thanks to the coronavirus pandemic. Mall operators are struggling with retailers who are unable to pay rent.
Readers may recall, there’s been a rapid surge in newly delinquent CMBS loans, with much of stress coming from the retail industry.
Shown here, Trepp’s latest CMBS remittance report shows CMBS delinquencies have recently risen to levels not seen since 2012.
This brings us to Brookfield Property Partners, a company with hundreds of properties in the US, more specifically, has 168 retail shopping properties, with a total square feet around 152 million. The company’s equity has been halved since the lockdowns as retailers can no longer pay rent, due to a collapse in consumption via broke consumers.
The C-suite executives at Brookfield Property must have been reading our posts on social distancing will revive drive-in movie theaters (dated in May). Or our latest post from early July showing how Walmart is transforming 160 parking lots into drive-in movie theaters this summer.
That is because Brookfield Property has just signed a deal with entertainment company Kilburn Live to turn some of its parking lots into drive-in theaters and virtual concerts, reported CNBC.
“People are desperate to leave home,” Michelle Snyder, chief marketing officer of Brookfield’s retail arm, said.
“If we can’t rent the mall, we are going to rent other space,” she added, referring to other large-scale events. “We actually have tons of ideas for our parking lots.”
Mall operators are quickly figuring out their once abandon parking lots could be a gold mine in the age of social distancing.