SNL: U.S. Commercial Real Estate Exposure to Blockbuster Not as Widespread as Expected

SNL Real Estate found in the wake of the Chapter 11 bankruptcy protection filed yesterday that there were fewer North American publicly traded firms exposed to the video chain as a main tenant.

September 24, 2010
By Allison Landa, News Editor

Courtesy Flickr Creative Commons user imjoshdotcom

Despite a few additional leases, commercial real estate exposure to Blockbuster Inc. was down in the second quarter. That’s according to SNL Real Estate, which found in the wake of the Chapter 11 bankruptcy protection filed yesterday by Blockbuster that there were fewer North American publicly traded firms who were exposed to the video chain as a main tenant.

SNL noted that on Sept. 15, 2009, the company said that it could either close or alter between 1,335 and 1,560 stores over the coming two years. “On the other hand,” SNL wrote, “the two Canadian-based companies that list the retailer as a top tenant increased their exposure by two leases each.”

Despite the bankruptcy, Blockbuster says it plans to keep all 3,000 U.S. stores open. However, it does plan to re-evaluate its portfolio to ensure that all stores are profitable, meaning that some stores could indeed be shuttered.

Listed by SNL as the major real estate companies with Blockbuster as the top tenant were Regency Centers Corp., Equity One Inc., First Capital Realty Inc., Weingarten Realty Investors, Acadia Realty Trust, RioCan REIT and Kimco Realty Corp. In June, Regency reported 1.20 percent of annualized rental revenues derived by blockbuster, with 65 leases with the retailer at the end of the second quarter. That was down from 73 at the end of the prior-year period and 81 at June 30, 2008. With the second-highest exposure at the end of the second quarter, Equity One had 20 leases with Blockbuster, or 1 percent of its annualized rental revenues. Despite a year-over-year increase in leases, Equity One saw a fall of 10 basis points in terms of percentage of annualized rental revenue.