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Mall Owner Hits Gap With Another Lawsuit Over Unpaid Rent

Gap Inc. is facing another legal battle over missed rent payments.

In a lawsuit filed this month in Texas, Brookfield Property Partners LP claimed that the apparel and accessories retailer has skipped out on $2 million in rent over three months. In addition, the mall developer — which owns shopping centers across the country — alleges that Gap is refusing to open stores at its properties in Texas.

“For three months running, Gap has failed to pay rent at virtually every Brookfield location nationwide, even for stores that Gap is operating,” Brookfield wrote in a court filing. “At present, Gap has withheld more than $2 million in rent from Brookfield in Texas alone.”

Brookfield is asking the court to force Gap to pay back rent as well as to reopen closed units in Texas.

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In late April, Gap announced that it would skip out on about $115 million worth of rent payments for its North American units. The company, which owns Old Navy, Athleta and Banana Republic in addition to its namesake brand, added that it was negotiating with landlords to defer or abate rent as stores remain closed. The corporation added that it could terminate some leases as well as permanently shutter some outposts. As of June 4, Gap had reopened over 1,500 of its roughly 2,600 North American stores after being forced to close all doors in mid-March because of coronavirus.

In addition to its legal battle with Brookfield, Gap is facing at least two other lawsuits over its failure to pay rent. Earlier this month, Simon Property Group filed a complaint in Delaware state court alleging that the retailer missed nearly $66 million in rent and other charges. In May, a suit against Gap was filed by New York City landlord 48th Americas LLC., which said the company violated its leasing agreement by missing fixed and other rent payments totaling over $530,000.

Amid the coronavirus pandemic, a number of fashion retailers, including Urban Outfitters Inc., H&M and Burlington Stores, have also announced that they would not pay rent. But non-payments have resulted in numerous recent litigation filed by commercial landlords against their retail tenants. For instance, Palm Springs Mile Associates Ltd. filed a suit against Ross Stores Inc. in Florida district court in May, accusing the off-price chain of owing $5.5 million in back rent on three stores. Also last month, the NBA was sued in New York district court for owing roughly $1.25 million in missed rent, as well as other charges, on its flagship in Midtown Manhattan.

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