Retailers

The more-than-$550 billion market for bonds backed by U.S. commercial mortgages may face losses even after promising Covid-19 vaccines become widespread, as key parts of the real estate market may not return to full strength anytime soon.

Debt delinquencies have soared for mall owners, which lost market share to e-commerce and were hit with tenant bankruptcies even before the pandemic forced shoppers and diners to stay home. By last month, more than 9% of retail commercial mortgage-backed securities were managed by special servicers.

As revenue-starved retailers fall further behind on rent payments, landlords' cash flow will be strained, and defaults on commercial real estate loans could rise.

The race to provide coronavirus relief for small businesses is opening new routes to fund payments, including underused credit lines.

Fitch assumes a significant spike in defaults over the next few months, as well as declining new issuance volume during the second and third quarters of 2020, fewer maturing loans and fewer resolutions by special servicers.

The collapse of dine-in revenues for restaurant chains during the outbreak is placing whole biz deals under the ratings microscope.

The falling rates continue a three-year trend of improving performance across numerous commercial mortgage sectors including multifamily, office and retail.

GameStop's plan to shutter up to 200 stores could adversely affect commercial mortgage-backed securities loans with a combined allocated property balance of almost $42 million, according to Morningstar Credit Ratings.

Mall landlords accustomed to offering rent reductions to ailing retailers are mulling a new strategy to forestall the industry's collapse: positioning themselves as lenders to tenants struggling to stay afloat.

Brick-and-mortar retail isn’t dead yet. Though the trend of retailers closing stores in the face of stiff competition from e-merchants is certainly troubling to commercial real estate lenders, it would be a mistake to conclude that all retail loans are risky. Here's a look at which ones are the safest and, potentially, the scariest.