Related Cos. Chairman Stephen Ross said the hotel and retail industries are being hit the hardest by the coronavirus pandemic, as travel has been dramatically curtailed and retail businesses have been forced to close up shop.
The crisis will force many retailers into bankruptcy, he said. That would add to a number of them, including department store chains Neiman Marcus, J.C. Penney and Stage Stores, and apparel maker J.Crew, that have already filed.
“You are going to have such a flood of cases going to the bankruptcy court,” Ross told CNBC Tuesday morning during an interview on “Squawk Box.”
“And these aren’t really the type of bankruptcies that were induced by bad practices,” he said. “It’s really all driven by the pandemic.”
In addition to malls and shopping centers, Related owns residential and office space across the U.S. In New York City, it operates the glitzy Hudson Yards mall and the Shops at Columbus Circle — both of which remain shuttered as the city, the hardest hit in the nation, continues to employ drastic measures meant to curb the spread of the virus. Hudson Yards, notably, is anchored by the now-bankrupt Neiman Marcus.
Ross added he is most concerned about small business owners in the retail and restaurant business not being able to turn their lights back on. “Many of them probably don’t have the wherewithal to reopen,” he said.
The retail bankruptcy filings also threaten thousands of more workers in an economy that has already suffered tens of millions of lost jobs.
Meantime, Related’s CEO, Jeff Blau, recently told CNBC that many of the company’s retail tenants had been deferring rent payments, as they try to work through the crisis.
By mid-April, he said Related had collected about 35% of April rents from its retail tenants overall. In its enclosed shopping malls, only about 20% of rent checks had come in, Blau said at the time.