The state of the economy presents serious challenges to the retail real estate industry that require thoughtful and proactive “distress management.” Approximately $1.42 trillion in commercial mortgage loans will mature between 2009 and 2012.

Property owners and managers should review loan documents and know who has decision making authority for their loan if considering refinancing. When dealing with a tenant under financial stress, landlords should consult with counsel early.

Tenant bankruptcies can do greater harm to a shopping center than landlord bankruptcies. Once a tenant declares bankruptcy, no further action can be taken to collect rent, terminate the lease, or recover possession of the premises.

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