Tenants, receivers benefit from retail-center foreclosures

In metro Phoenix's underoccupied, financially stressed shopping centers, the remaining tenants face yet another challenge. Besides their own financial woes linked to the worst recession in decades, they often have to cope with their landlord's problems. Rising vacancies and declining values have prompted many landlords to postpone improvements, cut back on maintenance and scrap marketing plans aimed at drawing traffic to the developments. Tenants, many of whom have requested rent reductions themselves, are frustrated with the lack of attention. The stress is endemic in retail real estate. Phoenix commercial real-estate-brokerage Marcus & Millichap Inc. estimates that one-half of the 1,753 Phoenix-area retail centers it tracks, ranging in size from 5,000 to 300,000 square feet, could be in trouble because their owners owe more than the property is worth.

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