NEW YORK--(BUSINESS WIRE)--As the COVID-19 crisis continues to threaten the viability of the shopping center industry due to the closure of stores and restaurants, ICSC applauds the bipartisan efforts of members of the House of Representatives introducing a solution creating a temporary relief plan for commercial real estate (CRE) borrowers. ICSC President and CEO, Tom McGee, has released the following statement:
“We applaud Congressmen Van Taylor (R-TX), Al Lawson (D-FL) and Andy Barr (R-KY)for outstanding leadership in introducing the Helping Open Properties Endeavor (HOPE) Act, which is the type of solution needed to help prevent widespread foreclosures that could destabilize the US economy. As our nation continues to combat the virus, the bill would provide temporary relief plan for commercial real estate (CRE) borrowers.
Due to unexpected loss of revenue and rent, many shopping center owners are facing the challenge of paying debt obligations with impaired cash flow. Without federal liquidity assistance we are looking at unnecessary damage to financial markets, increased unemployment and irreparable harm to communities across the country. Industries with CMBS debt have a particular challenge in that loan covenants are governed by multiparty state law contracts, which typically prohibit additional indebtedness barring borrowers from turning to banks for help.
The legislation would provide for temporary liquidity support for these borrowers, who through no fault of their own, have experienced a significant drop in revenue due to the COVID-19 pandemic and the resulting government mandates to close businesses. It is important to note that current federal COVID response programs, including the Paycheck Protection Program and the Main Street Lending Program expressly exclude most retail real estate borrowers.
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