REITs slip anew despite minor exposure to Toys ‘R’ Us closings


Business News - Opportunities - Reviews



NEW YORK, March 15 (Reuters) – Shares of several real estate investment trusts (REITs) that lease to Toys ‘R’ Us, the iconic toy retailer that plans to shutter or sell its U.S. operations, fell on Thursday as the sector reels from poor retail sales and rising interest rates.

Shares of Kimco Realty Corp fell 1.2 percent to $14.415, DDR Corp slid 1.5 percent to $6.855 and Brixmor Property Group Inc were off 0.75 percent to $15.235 in morning trading.

Kimco, which owns interests in 492 U.S. shopping centers, lists Toys ‘R’ Us as a major tenant in 12 locations, 10 of which also have Babies ‘R’ Us stores. Another five Babies ‘R’ Us are listed at other Kimco properties.

DDR leases to Toys ‘R’ Us at seven locations and Brixmor leases to Toys ‘R’ Us at three locations.

Brixmor owns and operates more than 475 retail centers while DDR owns or managers 273 shopping centers.

The retail sector, which fell 0.07 percent on Thursday, has been the worst-performing sector of the S&P 500 index this year as fear of rising interest rates has crimped performance and disruption from e-commerce rattles investors. Toys ‘R’ Us said on Thursday it was seeking approval to liquidate inventory in 735 U.S. stores, which debtors anticipate will close by the end of this year.

Commercial mortgage-backed securities (CMBS) also have exposure to the Toys ‘R’ Us closings.

Morningstar Credit Ratings in January identified 20 loans with a combined property balance of $500.2 million where the planned closing of 182 stores at the time could lead to a “significant” drop in occupancy and cash flow, it said.

Reporting by Herbert Lash
Editing by Nick Zieminski


Business News - Opportunities - Reviews



Leave a Reply