FARMINGTON HILLS, Mich., Feb. 16, 2011 /PRNewswire/ -- This morning, Borders Group, Inc. (NYSE: BGP) and certain of its subsidiaries, including Borders, Inc., filed a bankruptcy petition under Chapter 11 and an anticipated store closing list with the bankruptcy court.
Agree Realty Corporation (the "Company") currently has 14 properties leased to Borders, Inc. under triple net leases, including 13 retail properties and the Borders Group, Inc. corporate headquarters in Ann Arbor, Michigan. Two of the Borders retail locations are not occupied by Borders, but are occupied by subtenants under sublease agreements. The Company records annualized rental revenues of approximately $7.4 million, including approximately $1 million in non-cash rental revenues annually, from Borders, Inc. The revenue from Borders amounts to approximately 20% of the Company's annualized base rental revenues. Borders filed an anticipated store closing list with the bankruptcy court that included five of the Company's properties, which five stores generate approximately $2.6 million of the Company's annualized base rental revenues. The various leases are with Borders, Inc. and are guaranteed by Borders Group, Inc.
The Company has provided substitute borrowing base properties to replace Borders stores under its $55 million credit facility, and the credit facility banks have acknowledged that the financial condition of Borders and any default under any of the non-recourse loans secured by a property leased to Borders shall not be deemed a default under the credit facility.
"We wish Borders success in their plans announced today to restructure and operate under Chapter 11," said Joey Agree, President and Chief Operating Officer of the Company. "While uncertainty has clouded Borders for the past three years, our organization has anticipated such an event and worked to diversify our portfolio with leading national retailers."