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Lease Cancellations: Reader's Digest Writes The End to Several Leases

Also This Week, Cancellations from Lear Corp. and Cellcyte Genetics
September 2, 2009
The Reader's Digest Association Inc. filed voluntary pre-arranged petitions under Chapter 11 of the U.S. Bankruptcy Code on Aug. 24. Prior to the filing, more than 80% of the company's senior secured lenders had agreed in principle on the terms of a restructuring plan to significantly reduce its debt burden. Through Ch. 11, Reader's Digest is now looking to cancel seven leases and save itself $3.7 million/year in rental payments.

Lear Corp., a global supplier of automotive seating systems, electrical distribution systems and electronic products based in Southfield, MI, filed voluntary petitions in the U.S. Bankruptcy Court for the Southern District of New York in early July seeking relief under the provisions of Chapter 11. It too had reached an agreement in principle regarding a consensual debt restructuring with its secured lenders and its bondholders. It is looking to cancel six leases through bankruptcy reorganization.

Cellcyte Genetics Corp. entered into a lease termination agreement with its landlord terminating its lease at 1725 220th St. SE, Suite 103, in Bothell, WA. The lease was to run through Jan. 31, 2013. Monthly rent and utility costs over the course of the lease averaged approximately $47,000 per month. Cellcyte Genetics executed a promissory note in the amount of $275,000 and agreed to vacate the facility and leave certain of its furniture behind in full settlement of all amounts owing, and after set-off of prepaid rent in the amount of $69,616.

Company Address Affected Parties Comment
Reader's Digest 1730 Rhode Island NW, Washington, DC Rhode Island & M Associates 1,800 SF; exp: 10/31/2013; $79,200 annual rent
Reader's Digest 250 Old Orchard Road, Skokie, IL Aurora - Old Orchard LLC, et al 21,000 SF; exp: 6/30/2013; $624,000 annual rent
Reader's Digest 600 N. Pine Island Road, Plantation, FL Regus Management Group LLC Suites 430, 454; exp: 9/30/2010; $28,800 annual rent
Reader's Digest 11 River Bend Drive, Stamford, CT River Bend Executive Center Inc. 25,000 SF; exp: 8/31/2017; $564,000 annual rent
Reader's Digest 512 Seventh Ave., New York, NY 500-512 Seventh Avenue LP 35,000 SF; exp: 6/30/2015; $1,512,000 annual rent
Reader's Digest 1450 E. Parham Road, Richmond, VA LIT Industrial LP; (Direct Holdings Customer Service Inc., sublandlord) exp: 12/31/2011; $372,000 annual rent
Reader's Digest Norfield Corporate Park, Fields Lane, North Salem, NY Norfield Realty Corp. 5,000 SF; exp: 6/30/2010; $51,600 annual rent
Lear Corp. 300 E. Big Beaver Road, Troy, MI Osprey-Troy Officecentre LLC; (General Physics Corp., sublandlord)
Lear Corp. 200 McIntyre Drive, Newark, DE Newark Lear LLC c/o Stoltz Bros. Ltd.
Lear Corp. 36310 Eureka Road, Romulus, MI Romulus Realty Ventures LLC, c/o Janko Properties LLC
Lear Corp. 35 Corporate Woods Drive, Bridgeton/Earth City, MO Realty Associates Fund VIII LP, c/o Sansone Group/DDR LLC
Lear Corp. 25 Corporate Woods Drive, Bridgeton/Earth City, MO Bank of America and Alwal A.B. Moore, as Co-Trustees of the Alice Anheuser Bems Moore Trust
Lear Corp. 47828 Halyard Drive, Plymouth,, MI Demco 45 LLC


Download this story and all of the stories in the Watch List Newsletter here. The Adobe pdf version also includes all of this week’s leads of distressed properties and loans of concern, all of the local and national facility closures & layoffs, banks with distressed real estate portfolios and lists of loans approaching their maturity date. Plus the pdf version contains bonus news items not found in these columns or the CoStar Group web news pages.

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