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Gold/Mining/Energy : Canadian REITS, Trusts & Dividend Stocks -- Ignore unavailable to you. Want to Upgrade?

To: bill who wrote (2564)	2/2/2002 10:19:52 PM
From: bill	Read Replies (1) \| Respond to of 11633

Here's the article I referred to earlier Kmart fate has Reits on edge Shopping mall investments prepare to lose major tenant New York. The commercial real estate industry is dusting itself off and addessing the toll of last week's bankruptcy filing by Kmart, the largest in US retail history. The 2,1900 store chain has sought the termination of 350 leases on stores that are already closed, but analysts expect that number to grow with consequences for the industry. Kmart...is expected to seek the closure of as many as 500 underperforming stores. Hardest hit among the real estate investment trusts is Kimco Realty, the nation's largest stripmall owner. The Reit announced on Wednesday it expected Kmart to terminate the leases on 23 of the 75 stores it rents from Kimco. Kmart represents about 12%Q of Kimco's annual revenue. "They will demand lower rents on a whole bunch of other locations or they will threaten to abandon them by rejecting the leases." For two small Reits, Kmart's bankruptcy is proving dire. Malan Realty Trust, with 27 stores leased to Kmart, derives 27% of its annualized base rents from the retailer. Malan expects 6 to 12 of these leases to be rejected. Agree Realty, with 15 Kmart stores, collects 24% of its annual rent from Kmart. Once leases are rejected by the bankruptcy court, Reits join other unsecured creditors seeking a portion of the rent. But analysts warn that Reits' Kmart-induced headache may worsen. Finding tenants for stores that have been vacated has already proven difficult. Of 14 Kimco owned stores that Kmart previously closed, many have remained dark for months and, in some cases, years. Their proximity to Walmart stores often make them unattractive to rival retailers. END I realize these are all closures in the US but the implications are much broader than that.