As I was driving around today I noticed some sign holders with the familiar liquidation signs. This time it was at an unexpected corner where there is no Linens N' Things. As I approached I saw that the store in duress is Shoe Pavilion, which made me check this news when I got home. Shoe Pavilion previously pared down their number of non-performing shops and now it looks like all of them are non-performing as they are closing all 64 remaining shops.
This will further hurt commercial real estate. I have already seen several leasing signs where there hadn't been any while the consumers acted like drunks. Well now they have a hangover, to borrow Bush's off the cuff remarks on the economy. The particular Shoe Pavilion that is going down also occupies an area where there is a Halloween shop where a CompUSA used to be. These vacancies are going to begin to severely impact the property owners cash flow. Any commercial real estate owners who used leverage are going to be in a world of hurt. From the Weingarten Realty Investors (NYSE: WRI) recent quarterly report they called out that they have about 800,000$ at risk anually due to Shoe Pavilion leasing arrangements on 3 stores at 46k square feet (Note: They also have 8 Circuit City representing 4 million).
About 500 more frugal folks will be venturing into the holiday shopping season as they wind down their stores and expect a harsh job market when retail dies in January.
Shoe Pavilion was based on Sherman-Oaks, CA.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment