Page 6 - NBIZ August 2020

What to Expect When a

Single Asset Landlord

Files Bankruptcy

By Angeline Vachris Kell and Vianey Garza

ue to the ongoing retail or mixed-use retail spaces and
coronavirus (COVID- 19) warehouse owners, generating most
D pandemic, an unprecedented of their business income from rents. Generally speaking, a single
number of tenants have failed to pay Some other entities such as hotels, asset real estate (SARE)
rent in recent months. These tenants golf courses or marinas, may not be entity is one that owns a
may never recover from this pandemic considered SARE debtors if they offer single property or project
and the specter of forced stay-at-home additional amenities or provide other
orders. This situation, in turn, could services, including restaurants or bars, where the real property
cause numerous landlords to seek relief which give a portion of their revenue. itself generates almost all
by filing a Chapter 11 bankruptcy. its business income. SARE
Chapter 11 Bankruptcy debtors can include owners
Single Asset Real Estate Chapter 11 is a legal process of office buildings, resorts,
Generally speaking, a single asset that allows a business to propose a
real estate (SARE) entity is one that reorganization plan that allows the apartment complexes, retail
owns a single property or project entity to repay its debt over time, or or mixed-use retail spaces
where the real property itself generates plan a method of liquidation, enabling and warehouse owners,
almost all its business income. SARE the company to liquidate assets and generating most of their
debtors can include owners of office divide the proceeds. A SARE landlord business income from rents.
buildings, resorts, apartment complexes, may file Chapter 11 to reorganize and

6 NBIZ ■ August 2020