Kohl's Slowing Sales May Foreshadow Store Closures; $3.67 Billion in CMBS Exposure
Kohl’s reported declining comparable store sales for the first fiscal quarter ended April 30, 2022, which may foreshadow some risk for $3.67 billion in allocated property balance with exposure to the department store retailer. While we do not expect a slew of store closures in the short term, we believe there is risk for stores in underperforming locations, such as malls, or those with upcoming lease expirations. We identified only 10 properties in commercial mortgage-backed securities (CMBS) loans, totaling $328.2 million in allocated property balance, where Kohl’s lease will expire before YE2023. The highest concentration of lease rollover over the next 10 years is in 2024, when 23 leases are scheduled to expire.
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