01:23 PM EST, 01/09/2025 (MT Newswires) -- RBC notes that exposure to Comark's bankruptcy filing is relatively limited within its REIT coverage universe. By store count, Primaris REIT (PMZ-UN.TO) appears to have the most at 36 stores (115,000 sq ft, 1% of GLA), followed by Morguard REIT and Morguard Corp ( MRCBF ) (MRT-UN.TO, MRC.TO, 28 stores), Smart Centres REIT (SRU-UN.TO, 11 stores), and RioCan REIT (REI-UN.TO, 9 stores).

With the first quarter a typically weak seasonal period for retail bankruptcies and closures, RBC expects more will likely follow. However, RBC also believes retail fundamentals remain strong, underpinned by resilient demand, low vacancy, healthy renewal leasing spreads, and minimal new supply. For Primaris, Comark accounts for ~1% of gross rent (~$5 million; $0.05/unit or ~3% of our 2025E FFOPU). Of note, the vast majority of its leases expire in 2025, with a few in 2026. While closures could create a short-term drag, Primaris has already been actively marketing the space to address upcoming maturities. "As well, we see an opportunity to re-lease at higher rents and to higher quality tenants."

By way of background, Comark filed for creditor protection under CCAA. Comark operates 221 stores in Canada under the Ricki's (75 stores), cleo (54), and Bootlegger (53) banners, with the remainder being combo stores (39). The company indicated plans to liquidate and close all of its Ricki's and cleo stores, while exploring opportunities for its Bootlegger locations (including reducing its footprint).

Price: 15.09, Change: -0.02, Percent Change: -0.13