This article is from the Australian Property Journal archive
ONE of Macquarie DDR Trust's tenants, department store chain Mervyns has files voluntary petitions under Chapter 11 of the United States Bankruptcy Code to restructure its debt and re-align its business operations.
Mervyns said it intends to work with its stakeholders to execute its reorganisation through Chapter 11.
At the same time, the company said Mervyns stores will remain open and business will continue as the company moves through the bankruptcy process.
Macquarie DDR yesterday said Mervyns is fully up-to-date with rental payments for all leases and that management will continue to monitor the position closely. Mervyns currently makes up 10.6% of Macquarie DDR’s portfolio.
Of the 37 Mervyns sites in the trust’s portfolio, 26 are in California, five in Arizona, five in Nevada and one in Texas. Also, 26 properties are part of larger open air shopping centres, three of the assets are free standing and the remaining eight adjoin malls.
Developers Diversified Realty and Macquarie DDR formed a 50:50 joint venture in 2005 for the $US407.2 million selective purchase of 37 well located Mervyns assets in regions with strong demographics. After the purchase, the venture leased the assets back to Mervyns for 15 years at an annual rent of approximately $US30 million (MDT share, $US15 million).
Australian Property Journal