Malan Feels Sting From Kmart Bankruptcy

BINGHAM FARMS, MI-Malan Realty Investors, Inc. derives approximately 25% of its annualized base rents from Kmart Corp., which leases 27 properties from the REIT. The hit to funds from operations could be as high as $2.2 million a year, or $0.43 per share.

“While Kmart has not informed us of any stores it intends to close in our portfolio, we estimate Malan has a potential exposure on approximately six to 12 properties,” says Malan chief executive officer Jeff Lewis. “The likely scenario is that of these six to 12 properties, Kmart may reject the leases on some of these properties while closing stores and subleasing the space on the others.