With foot traffic on the wane, retail property owners face more financing hurdles
By Esther Fung | The Wall Street Journal
The retail malaise hasn’t stopped shopping-center landlords from getting loans—it’s just getting harder.
With an oversupply of malls, changing consumer habits and increasing competition from e-commerce, property owners frequently have to spruce up their assets to make them trendier and draw more foot traffic.
But the process of getting the financing for this reinvestment has gotten more complicated, said analysts, lenders and landlords. Lenders now grill landlords repeatedly about tenants’ creditworthiness and exposure to competition from neighboring developments and e-commerce. On top of that, borrowers may have to pay higher interest rates than they are used to, as the perception of risk increases and the Federal Reserve boosts short-term interest rates.