US Mall Owner Taubman Tells Tenants To Pay Up

U.S. mall owner Taubman is telling tenants that their rent must be paid despite the inability to meet obligations, according to a CNBC report on Sunday (March 29).

The real estate investment trust said it still has its obligations to meet — such as paying lenders on mortgages and paying for utilities, according to a memo obtained by CNBC dated March 25.

“The rental income that we receive from tenants is essential in order to meet these obligations,” Taubman said. “All tenants will be expected to meet their lease obligations.”

The Cheesecake Factory, for example, said it could not pay rent in April and it has to furlough roughly 41,000 hourly workers.

“We are in various stages of discussions with our landlords regarding ongoing rent obligations, including the potential deferral, abatement and/or restructuring of rent otherwise payable during the period of the COVID-19 related closure,” Cheesecake Factory said in an SEC filing.

The California-based chain has furloughed about 41,000 hourly restaurant staffers because of reductions in dine-in service and “landlord closures of certain properties,” it said in the filing Wednesday (March 25).

Meanwhile, in the U.K., landlords are threatening to sue merchants who haven’t paid their rent because of government-mandated shutdowns due to the COVID-19 outbreak.

The Vietnamese noodle chain Pho, Escape Hunt and Caffe Concerto all face possible legal action, according to the Financial Times on Sunday (March 29).

At issue is the landlords continue to have their obligations to meet. The rents help pay those bills. The U.K. hasn’t granted a holiday to businesses to forgo paying their rents. The merchants, meanwhile, say a free period from rents wouldn’t be enough to help them because consumer traffic has dried up with the mandatory stay-at-home policies nations have put in place to thwart the spread of the coronavirus.