Eric Rapkin, Real Estate Practice Group Chair, spoke to Private Equity Real Estate on the topic of mall landlords inquiring to purchase their retail tenants. Rapkin elaborated that the move would allow landlords to continue attracting shoppers, and it would also avoid triggering co-tenancy agreements that would allow smaller tenants to dissolve their leases if the anchor tenant leaves. Owning an anchor tenant could also allow a landlord to make changes to a property that would otherwise be vetoed by an anchor.
“Ultimately, controlling your real estate has value. I don’t think the mall owners are looking at this as an opportunity to get into the fast fashion business or the department store business. This is a real estate owner saying there’s real value to us controlling our own real estate,” Rapkin said.