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Many renters who missed rent payments during the pandemic are unable to access billions of dollars in federal rent aid that started flowing to states and cities five months ago, the Wall Street Journal reported. Local governments across the U.S. have struggled with how to distribute the money, and some have complained that their staffs are being deluged by a flood of aid requests. Numerous renters are being disqualified for failing to correctly complete their applications, local officials say. President Biden has yet to say if he will extend the eviction ban that was first put in place by the Centers for Disease Control and Prevention back in September 2020 and is set to expire on June 30. It has been extended before. f the ban expires before more of the $47 billion in aid reaches landlords and tenants, it will result in a surge in evictions the money was intended to prevent, housing advocates say. About 11 million tenants are considered at risk of eviction due to financial hardship, according to government figures. While the U.S. Treasury Department oversees the rent aid, local officials are responsible for distributing the money. They have some leeway in deciding how to distribute it and what tenants must do to qualify. Treasury last month recommended a series of changes to expedite payments and break the logjam. Those included loosening documentation requirements for renters, as well as allowing aid to be paid directly to renters instead of landlords.

Victoria’s Secret is facing allegations by its landlord that the company prematurely ended its stay at the Westfield World Trade Center Shopping Center, located in downtown Manhattan, in alleged violation of a lease agreement, YahooFinance.com reported. In a complaint filed in late May in New York state court, Westfield made claims for more than $30 million, alleging that the retailer had “refused to pay rent” and backed out part way through from a 12-year lease that was meant to end in 2029. The suit seeks more than $4.2 million in unpaid rent and roughly $28 million in damages for the alleged violation of the lease. “By virtue of Victoria’s Secret’s impermissible surrender of the premises, failure to continuously open for business and operate and failure to pay rental as it became due and owing, Westfield terminated the lease effective May 27, 2021,” Westfield wrote in its complaint. “As a result of Victoria Secret’s defaults under the lease and the resulting termination, Westfield is entitled to accelerate all rental as if the lease had not been terminated.” Lease agreements sometimes address these scenarios through what are known as co-tenancy clauses. Such provisions may allow tenants to reduce their rent or leave their premises during their lease term, if they can show other important tenants have already left. Victoria’s Secret allegedly invoked such co-tenancy failures and sought to terminate its lease. But Westfield argues in its suit that the retailer had not shown evidence for its claim about such co-tenancy issues. Read more. https://finance.yahoo.com/news/victoria-secret-hit-landlord-suit-215525…

What does the future hold for the retail industry? Watch the latest episode of ABI's "Industry Viewpoints" featuring Laura Davis Jones of Pachulski Stang Ziehl & Jones (Wilmington, Del.). https://www.youtube.com/watch?v=BSK20W9r2l4&feature=youtu.be

Occupancy issues are at the heart of many significant retail cases, as detailed in the ABI publication Retail and Office Bankruptcy: Landlord/Tenant Rights, available at the ABI Store. https://store.abi.org/retail-and-office-bankruptcy-landlord-tenant-righ…

As distressed real estate investors struggle to find enough properties to snatch up, at least two money managers think they’ve found an untapped source of troubled hotels, offices and retail space: commercial real estate bonds, Bloomberg News reported. Hedge fund Axonic Capital and startup Metamorphosis Hotel Capital Partners are picking apart commercial mortgage-backed securities as they hunt for bargains, according to people with knowledge of the funds’ strategies. The two have different plans for how to gain possession of the underlying assets, but their end goals are similar: to take control of, fix and flip ailing properties for significant profit. Grabbing CMBS collateral on the cheap is hardly a new tactic — firms did it after the global financial crisis. This go around, the thinking is that properties that were financed by banks may continue to receive time from their lenders to meet interest obligations. But buildings with mortgages that were bundled into bonds and sold to investors likely have less flexibility to avoid being sold off should they miss looming payment deadlines. “This is an interesting strategy that’s proven successful in other asset classes,” said Paul Norris, head of securitized-credit investing at asset management firm Conning & Co., which oversees about $198 billion globally. “We expect to see more hedge funds do this,” he said, noting that he’s not pursuing the strategy himself. Read more.

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The U.S. government’s nationwide prohibition on evictions can stay in effect, a federal appeals court ruled, Bloomberg News reported. A three-judge panel in Washington, D.C., said that the eviction moratorium instituted by the U.S. Centers for Disease Control and Prevention can continue while the Biden administration appeals a lower-court ruling that overturned the ban last month. In that case, U.S. District Judge Dabney Friedrich ruled the CDC had exceeded its authority when it issued a broad moratorium on evictions across all rental properties. After the government appealed, Friedrich put a temporary stay on her order. In upholding the stay on Wednesday, the appeals court said the government had made a “strong showing that it is likely to succeed on the merits.” The moratorium, first enacted by President Donald Trump and extended by President Joe Biden, aims to prevent evictions amid a public health emergency that has seen millions of Americans lose their jobs and fall deep into debt. The Alabama Association of Realtors, which filed the suit challenging the moratorium, didn’t immediately respond to a request for comment.

More than 11 million Americans are behind on their rent and many could be pushed from their homes when the national eviction ban expires in June, CNBC.com reported. The Centers for Disease Control and Prevention’s eviction moratorium, which has been in effect since September, will lift on June 30. Although the policy has been far from perfect at keeping renters housed, it’s reduced the normal number of eviction filings over the same time period by at least a half, according to Peter Hepburn, an assistant professor of Sociology at Rutgers University-Newark and research fellow at The Eviction Lab. Experts say the number of evictions could skyrocket when the ban lifts. Around 15% of adult renters are not current on their housing payments, according to an analysis by The Center on Budget and Policy Priorities. The CDC’s eviction moratorium has faced numerous legal challenges and landlords have criticized the policy, saying they can’t afford to house people for free or shoulder the country’s massive rental arrears, which could be as high as $70 billion. Yet housing advocates say the ban is lifting at a terrible time for both property owners and tenants, with states still scrambling to distribute the $45 billion in rental assistance allocated by Congress to address the crisis. “We need to let this moratorium stay in place until we spend all this money,” said Mark Melton, a lawyer who has been representing tenants facing eviction pro bono in Dallas. “If you bail out the renter, that means you bailed out the landlord,” he said.