Profimex Market Review Update – November 19, 2020
Simon Property gives up on four struggling malls. Why more could follow
According to KBRA Credit Profile, Simon Property Group, the largest REIT focused on the retail sector, decided to hand over the keys of four of their shopping centers with $410.9 million of mortgage debt. Instead of trying to work out the severe position of those struggling shopping centers, Simon Property Group is engaging in a “friendly foreclosure”. “While characterized as having operational expertise and deep brand relationships that support quality tenant rosters, SPG is not immune to the adverse effects of the pandemic,” the KBRA Credit Profile team said.
Courts Deny LA Apartment Owners’ Challenge To City Eviction Moratorium
The U.S. District Court Judge, Dean Pregerson, denied an attempt by the Apartment Association of Great Los Angeles (AAGLA), an organization of apartment owners, to overturn the city’s protection of renters. The association’s argument was that the city had changed the landlord-tenant relationship and violated the constitutional rights of owners. “Although it appears at this stage of proceedings that the city moratorium substantially affects landlords’ contract rights, the manner in and extent to which it does so appears reasonable under the circumstances,” Pregerson wrote in his ruling. “AAGLA has not, therefore, demonstrated a likelihood of success on the merits of its constitutional claims.”