Manulife US Reit’s fifth-largest tenant to end lease prematurely
THE manager of Manulife US Reit announced on Wednesday (Jun 7) that its tenant, The Children’s Place, has exercised its early-termination rights for the leases expiring on May 31, 2029.
It will vacate its 197,949 square feet of space in the Secaucus, New Jersey, property on May 31, 2024.
The Children’s Place is Manulife US Reit’s fifth-largest tenant by gross rental income and contributes 3.3 per cent of the Reit’s overall gross rental income.
The leases include a one-time early-termination option, which The Children’s Place has chosen to exercise, the manager said in a bourse filing. The Children’s Place is obligated to pay rent until May 31, 2024, and has paid a termination fee of approximately US$4 million.
The manager said it is working to secure new leases to fill the space occupied by The Children’s Place. Its current rental is below the passing rents at the property (approximately 16 per cent) and market rents (approximately 21 per cent).
Assuming the lease was terminated on Jan 1, 2022, the pro forma impact on Manulife US Reit’s distribution per unit on the loss of revenue for FY2022 would be a reduction in DPU before retention from US$0.0497 to US$0.0462.
Units of Manulife US Reit closed at US$0.174 on Wednesday, up US$0.005 or 3 per cent, before the announcement.
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