Retail Landlords Face Financial Problems after Borders Bankruptcy

Retail landlords around the country are not happy about the recent closing of several Borders stores that will deny locations millions of dollars in rent and put thousands of square feet back on the market.

After the Ann Arbor, Mich.-based company announced that it would file for Chapter 11 bankruptcy last week, Borders also issued a statement that it would shutter 200 locations. Eight of those are in Washington alone, in Kensington, Friendship Heights, Tysons Corner, Largo, Bowie, Stafford and Winchester. These locations alone account for 200,000 square feet of retail space and are expected to be closed by April.

Altogether Borders has nearly $1 billion in lease obligations that it will now have to deal with as the closings go into effect. Some landlords are getting a head start on the closures, such as Federal Realty Investment Trust that leases space to four Borders superstores across the country. These include the locations at 5333 Wisconsin Ave. in Friendship Heights and White Flint Mall in Kensington.

Have questions about Chapter 11?  Contact the Malaise Law Firm to speak with a San Antonio bankruptcy attorney.