Commercial, Retail & Industrial Real Estate

Wayne, NJ-based Toys “R” Us filed a voluntary petition for Chapter 11 bankruptcy protection in the Eastern District of Virginia (Richmond) on Monday (Case no. 17-34665). Toys “R” Us operates more than 1,600 locations for both Toy “R” Us and Babies “R” Us and employs approximately 64,000 people. The chain is seeking borrow money in order to pay suppliers by restructuring $5 billion in long-term debt. The company noted that the approaching holiday shopping season accounts for 40% of its net sales.

Prior to the filing, almost all the company’s vendors sought cash in advance before shipping products, forcing Toys “R” Us to raise $1 billion for suppliers. The company’s debt is attributed to a $6.6 billion buyout in 2005 led by KKR & Co. LP, Bain Capital LP and Vornado Realty Trust.

Continue Reading Toys “R” Us Files For Chapter 11 Bankruptcy Protection

Thirty six years ago today, MTV was launched. The song by the The Buggles “Video Killed the Radio Star” was the first video played. Non-video, radio artists, like Christopher Cross (remember “Sailing?”), suffered, by not being ready for TV. Yet, how many people today actually think about a singer’s video and not their song? Heck, when was the last time you saw a video on MTV?

Just like MTV didn’t really kill all the radio stars, Amazon, demographic changes, and consumer tastes are not killing all the shopping centers and malls. Rather, these developments are changing the way we use and see the shopping center and mall experience.

True, there are a number of so-called “dead” centers. At one time, these were popular (just like Christopher Cross), anchored by Sears, JCPenney, or some other big box store that drew traffic. The structure, zoning, and high traffic areas with good visibility to the community still exist. There is just no draw… no “MTV” … to bring people in. This presents opportunities for developers to resurrect “dead” centers.

Continue Reading Amazon Isn’t Killing All the Shopping Centers, Just Like Video Didn’t Kill All the Radio Stars

In the United States, the general rule about legal fees is that each party to a lawsuit pays his or her own fees. However, like any rule, there are exceptions. In the event a contract specifically provides for the payment of legal fees, or a statute allows the recovery of legal fees, the prevailing party may apply to the court for reimbursement. There is no statute in New Jersey that allows recovery of legal fees for a successful tax appeal. The tenant may only recover the fees from a landlord if the lease expressly provides for such a recovery, or if the landlord separately agrees to pay them. As the parties learned in Crosspoint Developers v. Wegmans Food Markets, the express terms of the lease can lead to unforeseen results.

Lowes, as a tenant in a retail shopping center, filed a tax appeal and was successful in getting a reduction in the assessment. Since the appeal involved an entire retail center, all tenants received the benefit of Lowe’s efforts through a reduction in their pro rata shares of taxes.

Continue Reading Tenant’s Right to Legal Fees in a Successful Tax Appeal

Golfsmith International, Inc., a specialty golf retailer with 109 Golfsmith stores across the U.S. and 55 Golf Town stores in Canada, filed for Chapter 11 bankruptcy protection in Wilmington, Delaware on Wednesday, September 14, 2016. This case follows other large sports retailer bankruptcy cases, including Sports Authority and Eastern Mountain Sports, who both filed Chapter 11 proceedings in Delaware earlier this year.

Continue Reading Another Sports Retailer Bankruptcy – Golfsmith International, Inc. Files for Chapter 11 Protection in Delaware

How can retail landlords make more money? A recent article in the Wall Street Journal, entitled Shopping Malls’ New Product: Fun reveals the answer…add amusement attractions.

According to the article, many U.S. malls are profiting from entertainment tenants and amusement attractions, including go-kart racing, indoor rope climbing, laser tag, skydiving simulators, escape rooms, high-tech golf driving ranges, glow-in-the-dark miniature golf, state-of-the-art movie theaters, and new bowling and dining options.

Continue Reading Shopping Malls Profit from Fun

Have you ever read a confusing contract and scratched your head? Whether it is a lease, operating agreement, or other contract, it is imperative to understand what you want. It is also important to negotiate and draft agreements quickly to avoid losing opportunities. Failure to clearly say what you mean can result in unexpected costs, disputes and lawsuits.

  1. Avoid Ambiguous Words

Black’s Law Dictionary states that language in a contract is “ambiguous” when it is reasonably capable of being understood in more than one sense. An easy tip is to avoid ambiguous words. However, this can be a challenge, since even words that seem clear to you, may not be clear to others.

Continue Reading Say What You Mean – 3 Easy Steps to Avoid Ambiguous Agreements

A transit strike could hurt many people. Many people could suffer delays, or be left without a way to get to work. Businesses could also suffer without employees and customers. And commercial, retail, and other property and business owners could lose business and sales.

The looming strike is a reminder that although you can’t stop some strikes and disasters outside of your control, you can reduce risks by taking the following steps.

Have a Disaster Plan. You can prevent problems and limit losses by having a disaster plan. Having an adequate plan and ensuring that your team knows what to do can help to reduce risks. For example, having alternate ways to access and manage your property and business can help to limit losses.

Review Your Documents. You can also reduce risks by reviewing your insurance policies, leases, contracts, and other documents. This can help to ensure that your documents are updated, adequately meet your needs, and limit losses from events outside of your control.

Complete Deals and Resolve Disputes Now. Another way to minimize risks and maximize opportunities is to more quickly complete deals and resolve disputes. The looming strike is a reminder that there is a need for speed in business and real estate. If you fail to act quickly, you can lose opportunities, such as historically low interest rates, available financing, and rising property values. Delays can also cost you money and damages, from delayed delivery dates to delayed opening dates. And as time passes, other bad things can happen, from bankruptcies to vacancies. In a previous blog post, I discussed ways to quickly complete your deals and resolve your disputes with the help of experienced counsel.

The healthy but affordable grocery store chain, Fresh & Easy, filed for Chapter 11 bankruptcy protection in Wilmington, Delaware on Friday. The chain operates 97 stores in Arizona, California and Nevada. This, like the recent Great Atlantic & Pacific Tea Co. (“A&P”) bankruptcy case, is the company’s second Chapter 11 filing in recent years.

Bankruptcy documents filed on Friday named Amir Agam of FTI Consulting Inc. as the Chief Restructuring Officer. The documents listed the debtor’s assets as between $10 and $50 million, with debts between $100 and $500 million.

This recent filing should serve as a warning to property owners. Landlords need to ensure that their claims are assets and are protected in the bankruptcy case. Like the A&P case, there will most likely be a number of auctions and discrete sales of the leases. It is vital that landlords contact counsel and develop a plan for their next steps.

Stark & Stark regularly represents landlords and trade creditors in Chapter 11 proceedings across the country, including filings in New York and Delaware. Whether or not you contact our Commercial, Retail, Industrial and Multi-Family Practice Group, landlords and trade creditors are strongly encouraged to contact legal counsel immediately.

It’s just a few days away! The papal visit is expected to bring more than 2 million visitors to the Philadelphia area. Our last two articles (here and here) dealt with the positive economic impacts for the region and managing the masses during this event. Here are five (5) tips that should be at the top of the list for landlords and owners of commercial, retail and multi-family properties.

Review your Leases. With an event of this magnitude, it is a good time to take a last minute look at your leases to ensure all items are appropriately addressed. For instance, does your lease have certain notice requirements for limiting access to parking areas designated for tenants and their customers? If you plan on sectioning off certain parking areas, did you send notice out in time? Sometimes leases will have a provision that allows you to circumvent certain notice requirements, if actions are done for health and safety reasons.

Continue Reading Pontiff’s Visit to Philadelphia (Part III) – Top Five (5) Last Minute Tips for Landlords/Owners

This blog was co-authored with my colleague Tom Onder, Esq.

Pope Francis is coming to Philadelphia in September. The visit will attract millions of visitors from around the world. A quick look at prior Pontiff visits shows the enormous influx of people that the Pope attracts to other global cities:

Attendees

Global City

3.5 Million

Copacabana Beach, Rio, Brazil in 2013

6.6 Million

Vatican in 2014

6 Million

Manila, Philippines in 2015

+2 Million

Expected to see the Pope in Philadelphia  [1]

Many commercial, retail and other property owners are now planning to benefit from the multitude that come to see the Pope when he visits the United States in September. Currently, the Papal itinerary has him in Washington, D.C., New York, and Philadelphia.

Bigger Economic Impact than the Super Bowl

Continue Reading Papal Visit to Philadelphia – Positive Economic Opportunities for Commercial/Retail Owners