
How Will Latest Sears, Kmart Closings Affect CMBS?
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The latest round of retail closures by Sears Holdings Corp. could adversely affect roughly $302.5 million of loans in eight commercial mortgage-backed securities (CMBS), reports Morningstar. The Hoffman Estates, IL-based retailer said it plans to shutter 64 Kmart and 39 Sears stores this spring.
Among those 103 stores, Morningstar Credit Ratings found a total of 16 CMBS loans with a balance of $671.1 million.
Notably, Sears will be the second anchor closing at two locations, the Bangor Mall in Maine, which is already specially serviced, and the Hanford Mall in California. With the loss of multiple anchors, Morningstar warns that these properties could begin to lose in-line tenants if the anchor boxes are not backfilled.
Morningstar also notes, Sears has 305 locations backing 195 CMBS loans with an aggregate allocated principal balance of $12.68 billion.
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