Brookfield Properties Sues Gap Over Missed Rent Payments at Texas Stores
Mall operator Brookfield Property Partners is suing Gap Inc. for refusing to open stores at the company’s properties in Texas and for owing more than $2 million in unpaid rent over three months, Bloomberg reported last week. “For three months running, Gap has failed to pay rent at virtually every Brookfield location nationwide, even for stores that Gap is operating,” the landlord said in court papers filed last week. “At present, Gap has withheld more than $2 million in rent from Brookfield in Texas alone.” Gap Chief Executive Officer Sonia Syngal said earlier this month the company was in talks with its landlords and was paying “what we consider fair rent.” Gap has reopened more than 1,500 of its roughly 2,600 stores in North America.
Total Retail's Take: This isn't the first time a mall property owner has sued Gap for lack of payment. Simon Property Group, the biggest mall owner in the country, sued Gap earlier this month, saying it failed to pay more than $65.9 million in rent and other charges due during the coronavirus pandemic. Simon malls have 412 Gap stores, including Banana Republic and Old Navy locations. This makes Gap Simon’s biggest in-line tenant at its malls in terms of rent. These court battles highlight the mounting tension between retail landlords and their tenants, many of which stopped paying rent after the crisis forced them to shut stores. Hundreds of tenants have missed rent payments or shuttered stores in recent months, and landlords have sent default notices. It will be interesting to see the outcomes of these cases, and whether other mall operators or landlords will follow suit with Gap or other retailers.