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The Mall of America’s Community Commons opens today, donating unoccupied space to small businesses affected by violent protests and the pandemic. Grady Trimble from FOX Business with more.
U.S. retailers are still struggling to pay their rent in the wake of the COVID-19 pandemic, according to the nation’s largest shopping mall operator.
Indianapolis-based Simon Property Group said its US retail portfolio was showing signs of continued improvement with net invoiced rents collected from the third quarter to November 6 totaling 85%. That’s up from 72% in the second quarter, or 78%, including deferred amounts.
Lower rental income, including unpaid rents and concessions to tenants, resulted in an impact of $ 435 million, or $ 1.10 per share, on third quarter earnings.
| Teleprinter | security | Latest | Change | Change% |
|---|---|---|---|---|
| SPG | SIMON PROPERTY GROUP INC. | 79.93 | +0.61 | + 0.77% |
“While we have made significant progress in dealing with collections, we still have unresolved amounts with some large domestic tenants unfortunately refusing to pay their contractual rent even though they are open and operational,” said CEO David Simon.
In March, non-essential businesses, including retailers, were ordered to temporarily close their stores to help slow the spread of COVID-19.
Simon Property Group tenants, including Gap, skipped payments while their stores were closed. Gap had 412 stores, including Banana Republic and Old Navy, in Simon Property Group malls in April. The two companies have filed counter-actions amid the ongoing dispute.
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The mall operator had to contend with a series of store closures as bankruptcies continued to sweep the retail landscape. Simon Property Group has partnered with other companies to rescue bankrupt retailers, including JC Penney and Brooks Brothers, to keep their locations occupied.
The occupancy rate of malls and high-end stores was 91.4% at the end of September, down 3.7 percentage points from a year ago.
The Simon Property Group said on Monday that third quarter profit stood at $ 145.9 million, up from $ 544.3 million a year ago. Revenue fell 25% year over year to $ 1.06 billion.
“Despite COVID-19, we are encouraged by the increases we are seeing in buyer traffic, retailer sales and tenant rent collections in our portfolio,” Simon said.
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The company said the basic minimum rent per square foot had increased from $ 1.58 to $ 56.13. Buyer traffic and total sales volume continued to improve, down 10% year over year.
Stocks are down 47% this year through Monday, underperforming the S&P 500’s 9.9% gain.
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