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SPG's Exposure to the the KB Toys Bankruptcy and Liquidation

January 29, 2009 – Comments (2) | RELATED TICKERS: SPG , IYR , SBUX

The bankruptcy of all KB Toys stores was announced over a month ago, it's old news. But I just found out some relevant information about how much exposure Simon Properties (SPG) has to them. I was searching around Simon.com and found that Simon has (soon to be had) 40 KB Toy Stores in their malls.

Note: I can’t link to this search page, it's dynamic. To see it for yourself, you need to go to simon.com, click on “find a store”, then search for “k b toys”. Or see the screenshots on my blog.

The KB liquidation will cost Simon 40 tenants. By itself, that probably won’t have a huge material impact on Simon’s bottom line. But it’s certainly worth noting as part of a much larger trend, and we'll see if it's noted when SPG reports earnings before the open tomorrow.

Starbucks also announced the closure of 300 more stores yesterday, and that can’t help the Commercial Real Estate situation. Not to mention that a lot of these malls have lost their “anchor” stores like Macy’s. That means other tenants may be able to ditch their leases without penalty.

Disclosure: Short SPG.

Originally posted on my blog: bearishnews.com.