After herd immunity quells the threat of COVID-19 and masks are thrown away, retailers will still be feeling the ill-effects of the pandemic, according to Andy Graiser, co-president of A&G Real Estate Partners, which aids companies in occupancy cost reductions, lease terminations, and dispositions.
“Last year, it seemed as though nearly every retailer in America was asking for rent deferrals,” Graiser said in a conference call hosted by the Jefferies investment bank and financial services company. “Now they’re staring at a ‘deferral bubble’ of $40 billion-plus that they’re going to have to pay back over and above their existing rent.”
The rent deferrals were agreed to by landlords in the opening stages of COVID-19’s spread last spring. At the time, business leaders and health analysts foresaw a “V-shaped” recovery that promised a restored economy by the Holiday season. It didn’t happen that way, said Graiser, and retailers started seeking rent abatements instead of referrals.Chain Storeage