An ABI Committee Newsletter
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| Vol 21, Num 1 | April, 2026
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by
Katharine Battaia Clark, Thompson Coburn (Dallas)
Patrick J. Potter, Dickinson-Wright (Washington, D.C.)
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From the Real Estate Committee leadership, welcome to 2026, a year that will no doubt prove interesting, engaging and hopefully prosperous for all. We are pleased to share with you the following updates and thoughts from the co-chairs.
Committee Leadership Changes
As we ushered in the new year, committee leadership changed for 2026. Charles Malloy (Covington & Burling) serves as Education Director, Daniel Bloom (Riker Danzig) serves as Newsletter Editor, David Levy (Keen-Summit) and Ignacio Labarca (Marini) serve as Special Projects Leaders, and Greg Corbin (Northgate) serves as Membership Relations Director. We encourage each of you to reach out to committee leadership with questions or suggested contributions relative to their respective workstreams.
Cautious Optimism for 2026
We kicked off the new year with the
Jan. 14 presentation by First America Economist Xander Snyder, whose slides and comments revealed CRE distress having reached its “high-water mark,” stabilization, “increased transaction volume,” refinancings having “turned a corner,” and accelerated lending activity. Even on the psychological chart, the market is on the upswing and heading in the direction of “hope, relief, and optimism.”
Still, there is cause for caution. Snyder’s pink flags included rising credit card debt and delinquencies, and construction costs having increased by 40% since 2020. He, like others, commented on the nationwide back-to-office rates continuing to hover in the 50% range and the recently coined “K-shaped economy.” Recent headlines — “Office Real Estate Stocks Tumble,” “Accelerating Losses in Apartment Portfolios” and “CMBS Delinquency Rates Rising” — to quote a
few, support the wisdom of caution.
Anecdotal (and very real) data is to the same effect. The first three months of this year have seen continued real estate business bankruptcy filings generally, as well as real estate-related retail (Saks and Eddie Bauer) and restaurant (Fat Brands) bankruptcy filings.
We live in interesting times, recognizing that 2026 is the Year of Horse. Let’s strap ourselves in for what, in the real estate industry, will likely be quite a ride.
Read Full Article Online →
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by
Sarah Primrose, King & Spalding LLP (Atlanta)
Christian Adams, King & Spalding LLP (Atlanta)
Lacey Shaffer, King & Spalding LLP (Atlanta)
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In October 2023, Rite Aid Corp. initiated a chapter 11 case in the U.S. Bankruptcy Court for the District of New Jersey. Under 11 U.S.C. § 365(d)(4), Rite Aid included a lease with Fair Oaks, LLC in its list of unexpired nonresidential leases it intended to assume.
Fair Oaks filed a motion to compel rejection of the lease because Rite Aid had not filed a formal motion to assume the lease, and because the statutory deadline to assume or reject had passed. Ultimately, the court held that Rite Aid’s notice adequately assumed the lease and thus complied with the statute.
Procedural History
Years earlier, Rite Aid had entered into a five-year lease with Fair Oaks in connection with a retail store located in Redwood City, Calif. Rite Aid notified Fair Oaks of its intention to renew the lease for another five-year term commencing Nov. 3,
2023; however, Rite Aid filed for bankruptcy in October 2023. Pursuant to § 365(d)(4), Rite Aid had a deadline of May 13, 2024, to assume or reject unexpired leases of nonresidential property (the “assumption deadline”).
Rite Aid filed its Notice of Assumption of Certain Unexpired Leases on Feb. 26, 2024, and attached an exhibit thereto that included the lease on a list of leases that Rite Aid intended to assume. Fair Oaks objected to assumption based on Rite Aid’s supposed failure to maintain the proper level of insurance per lease requirements.
On the assumption deadline, Rite Aid filed its Third Amended Plan Supplement and again included the lease in a Schedule of Assumed Executory Contracts and Unexpired Leases (the “assumption schedule”). It was undisputed, however, that Rite Aid never filed a motion to extend the assumption deadline or to assume the lease.
Fair Oaks then filed a Motion to Compel Rejection of Unexpired Real Estate Lease (the motion), arguing that Rite Aid’s failure to file a motion meant that the lease was deemed rejected because the assumption deadline had passed.
Read Full Article Online →
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by
Todd Carney, U.S. Bankruptcy Court (N.D. Tex.) (Dallas)
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The years 2023-24 taught real estate debtors that “preserving value” is a compelling story, but 2025 showed them that stories don’t substitute for adequate protection. Two developments out of New York, the Broadway Realty portfolio cases and the court’s refusal to let affiliates of Pinnacle Group tap lenders’ cash, showed a meaningful tightening: Courts want hard numbers, verifiable cushions, and lender-side protections that actually move risk off the secured creditor, not just rhetoric.
Why 2025 Looked Different
Section 363(c)(2) is old hat: A debtor can’t use cash collateral without (1) the secured party’s consent or (2) a court order that ensures that the creditor’s interest is adequately protected. But in large, multi-asset real estate filings, debtors historically bought time with short budgets, variance limits and a promise
that “operations will stabilize.” Judges in 2025 demanded more.
The Broadway Realty opinion scrutinized each plank of adequate protection, equity cushion, reporting, covenants and budget fidelity, rather than deferring to portfolio-level generalities. This resulted in a clear signal that the burden of proof is real and must be met with credible valuation and finance detail, not just a theme.
Read Full Article Online →
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