Even Landlords Don’t Want Blockbuster

Later this morning in a New York courtroom, Dish Network will turn in its final final list of Blockbuster leases it wants to keep — some 600 total out of close to 1,600 remaining. For now, of course, Dish has said that when it takes control of for-now-downtown-based Blockbuster it wants to keep open just two Dallas locations: the ones at 3501 McKinney and 4535 Frankford. But not so fast.

Earlier this week, the owner of the Uptown property — home to that particular Blockbuster since October 1996 — told the court: Thanks, but we’ll pass. The reason: 3501 McKinney, Ltd.’s attorney, Elisabeth Wilson (who’s also based in Renaissance Tower, oh, irony), writes that Dish has given the landlord no “adequate assurance” that Dish’s newly former BBI Operating, L.L.C. will do any better with Blockbuster than Blockbuster did with Blockbuster. Says the filing, Dish …

…failed to provide 3501 McKinney with current audited financial statements or other financial and operating information to assist 3501 McKinney in making a determination of whether a potential assignee is capable of: (a) financially performing under the Lease; (b) providing 3501 McKinney with adequate assurance for the payment of future rent and performance of all obligations set forth in the Lease, such as the property tax obligation; and (c) whether its operating performance is at a similar level as the Debtors’ performance at the time the parties entered into the Lease.

So it wants out. Now. Says one friend in commercial real estate, this isn’t much of a surprise, given that landlords carrying Blockbuster leases figure they can get higher rents from a tenant that, say, wasn’t in Chapter 11 since September and dying long before that. Which is why several other landlords have filed similar objections this week.