Loans

In 2017 alone, over $35 billion in CMBS loans were exposed to risk of default by retailers declaring bankruptcy, according to New York City-based Trepp LLC, which monitors the performance of securitized commercial mortgages. The loans were largely backed by mall properties that had leased space to retailers, many of which are now closing stores. “In the first 11 months of 2017 alone, more than 30 U.S. retailers filed for bankruptcy protection. That news certainly made those in structured finance take notice to the mounting concern surrounding brick-and-mortar retail,” states the report titled “The 11 Largest Retailer Bankruptcies of 2017.” As the “retail apocalypse” continues, with consumers increasingly choosing e-commerce purchases over brick-and-mortar malls, certain sectors have been particularly hard hit. Apparel and footwear sales have largely shifted on line, spurring the string of bankruptcies. The report is quick to note, though, that retail sales have actually been on the rise through 2016 and 2017, and that the “retail apocalypse” is simply a shifting of winners versus losers in a changing economic model. “In step with the rise of e-commerce, the popularity of traditional department store anchors is plunging, and hundreds of malls nationwide have reported dwindling foot traffic,” states …