Even Landlords Don't Want Blockbuster

Categories: Biz, Real Estate
BlockbusteronMcKinney.JPG
The McKinney Ave. landlord figures it can do better than a Blockbuster.
Later this morning in a New York courtroom, Dish Network will turn in its final final list of Blockbuster leases it wants to keep -- some 600 total out of close to 1,600 remaining. For now, of course, Dish has said that when it takes control of for-now-downtown-based Blockbuster it wants to keep open just two Dallas locations: the ones at 3501 McKinney and 4535 Frankford. But not so fast.

Earlier this week, the owner of the Uptown property -- home to that particular Blockbuster since October 1996 -- told the court: Thanks, but we'll pass. The reason: 3501 McKinney, Ltd.'s attorney, Elisabeth Wilson (who's also based in Renaissance Tower, oh, irony), writes that Dish has given the landlord no "adequate assurance" that Dish's newly former BBI Operating, L.L.C. will do any better with Blockbuster than Blockbuster did with Blockbuster. Says the filing, Dish ...
...failed to provide 3501 McKinney with current audited financial statements or other financial and operating information to assist 3501 McKinney in making a determination of whether a potential assignee is capable of: (a) financially performing under the Lease; (b) providing 3501 McKinney with adequate assurance for the payment of future rent and performance of all obligations set forth in the Lease, such as the property tax obligation; and (c) whether its operating performance is at a similar level as the Debtors' performance at the time the parties entered into the Lease.
So it wants out. Now. Says one friend in commercial real estate, this isn't much of a surprise, given that landlords carrying Blockbuster leases figure they can get higher rents from a tenant that, say, wasn't in Chapter 11 since September and dying long before that. Which is why several other landlords have filed similar objections this week.
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8 comments
LaceyB
LaceyB

Just as long as it's not another Bar-staurant or nail/hair salon. They are just so loud, for no reason these days. My "weekend" already starts on Thursday. Living in douche-central is a choice, but, class up the joint, in the brainer dept., if you must take away a perfectly well-functioning store.

Howard
Howard

Interesting. Does this filing suggest that Blockbuster hasn't been paying rent for some time at that location? And what other kind of tenant does the landlord expect to fill that location? (Could they already have a possible interested new tenant?)

stupidisasstupiddoes
stupidisasstupiddoes

That's what I was thinking. Are they paying their rent? Yes? Well then STFU.

G_David
G_David

Because commercial real estate leasing is so tight that they can turn away a paying customer? The number of empty storefronts I see around town, and in that neighborhood specifically, might have something to say about that.

Anonymous
Anonymous

The lease would be guaranteed by the parent company, DISH. Not sure the landlord can win that fight.

scottindallas
scottindallas

The landlord has the right to lease to whomever they wish

Anonymous
Anonymous

Um, I'm not an idiot. Clearly they have that right when the lease is up. What they don't have the right to do is claim mid-lease that they want to cancel a contract that will be purchased out of bankruptcy by a very solvent buyer. For better or worse, only the party in Ch 11 can reject a lease unless otherwise specified in the contract.

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