Reemerging inflation and stubbornly high interest rates — paired with shifting consumer preferences — are driving a surge in corporate bankruptcy filings, resulting in widespread real estate portfolio cullings and restructurings.
Total U.S. bankruptcy filings over the 12 months ending in March rose by 62,000 to 591,850, a nearly 12% increase year-over-year, according to the Administrative Office of the U.S. Courts.
One of the first things consumer-facing companies do in a Chapter 11 restructuring process is reevaluate their real estate portfolios to see which locations are performing, underperforming or have the potential to perform in the future, bankruptcy experts said.
Once they do, many landlords are faced with tenants asking to cut their rents or drop their leases altogether — which they are legally allowed to do with no consequence.
“The conversations themselves sometimes take the form of a game of chicken,” said Neill Kelly, managing principal and senior vice president of the restructuring and disposition team at SRS Real Estate Partners.
“It's not how I personally conduct those conversations, but it's very close to, in more cases than not, ‘Do this or take your store back,’” he added...
One of the first things consumer-facing companies do in a Chapter 11 restructuring process is reevaluate their real estate portfolios to see which locations are performing, underperforming or have the potential to perform in the future, bankruptcy experts said.
Once they do, many landlords are faced with tenants asking to cut their rents or drop their leases altogether — which they are legally allowed to do with no consequence.
“The conversations themselves sometimes take the form of a game of chicken,” said Neill Kelly, managing principal and senior vice president of the restructuring and disposition team at SRS Real Estate Partners.
“It's not how I personally conduct those conversations, but it's very close to, in more cases than not, ‘Do this or take your store back,’” he added...
RSK: Mainly about retail and franchise restaurants.
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- - Volume: 26 - WEEK: 31 Date: 7/28/2026 4:16:07 PM -