Macy's-closed A sign hangs in front of a closed Macy's department store inside a mall.

Retailers are tentatively re-opening the stores that were shuttered in mid-March due to Covid-19.

On Monday Macy's is planning to reopen 68 department stores in states that will permit it. Then, over the next six weeks it plans to reopen all of its 775 stores, including its major flagships in Manhattan.

Even those retailers that are less bold are making plans for re-opening. Apple may open a few stores in the first half of May, Apple CEO Tim Cook told Bloomberg but "not a large number."

A key question, at least for mall owners, is that as retailers restart operations, can landlords expect to see tenants pay their rents again?

Certainly April was a wash for these companies. New figures from Nareit show that sShopping centers collected 46.2% of typical April rents. That is compared with industrial REITs collecting 99% of typical rents in April and office REITs collecting 89.3% of typical April rents.

These May re-openings will not show up on May 1 for rent collections, says John Worth, Nareit EVP for research and investor outreach. Retail REITs will continue to collect rents from providers of essential services such as grocery stores, but that will not necessarily offset the missing rents from non-essential businesses, he tells

But May will still serve as a benchmark for retail owners looking at longer-term trends, he continues. "Whether consumers will come back to malls is a very important question out there," he says. Much will depend on how safe consumers feel in these stores. There were drops in foot traffic before the start of the stay-at-home rules, Worth noted. "That raises the question of when the stay at home rules are lifted, will people be out in force? We won't know until we actually see what is happening."

There are signs that retail tenants believe they have a struggle ahead even beyond the stay at home orders. Some retail tenants are seeking to renegotiate their leases to include more favorable terms such as pandemic escape clauses. Others are refusing to share sales data with the landlords, according to the Wall Street Journal.

Rating agencies have a dim view of how department stores will perform in the near to middle term, with many being hit with negative downgrades including Macy's, Kohl's and Nordstrom, to name a few.

The longer-term the picture does not look good either. Green Street forecasts that more than half of the department stores serving as mall anchors are going to close permanently by the end of next year, according to a report in CNBC.

"This begs many questions," Vince Tibone, an analyst at Green Street Advisors, told the publication. "What will a mall redevelopment look like post-Covid? Backfilling with any retail could be tough and most non-retail development now likely doesn't pencil."


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Erika Morphy

Erika Morphy has been writing about commercial real estate at for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.