I was at two social events in the last 48 hours, and one of the events had a very interesting conversation that I mentioned over in the Splash Mountain thread. But another party had a conversation with two very knowledgeable persons about Downtown Disney, OC's commercial real estate market, and the state of the Anaheim Resort District.
Like I surmised, TDA is bracing for some Downtown Disney tenants to not survive the current situation, especially if the Disneyland closure has to be extended through August. Most of those establishments have large enough corporate offices that they applied for and received PPP loans through the federal government back in April, and they are keeping a core group of employees paid with that money for now. But the PPP loan for payroll dries up by the end of August, and expenses not covered by the PPP loan are mounting and stacking up for all the tenants.
Particularly with the long term tenants, they are extremely nervous about the mid-term prospects for Disneyland attendance. The parks will be dealing with daily crowds a fraction of their usual size, the Anaheim Convention Center is closed through the end of the year now apparently, and hotel occupancy rates throughout the Anaheim Resort District are going to be way below historical norms. In short, the entire Anaheim Resort District is over-built with restaurants and hotel rooms for at least the next six months, even if Disneyland got approval to reopen July 17th which they didn't. TDA is trying to calm the tenants by attempting a big marketing push for locals for late this summer and fall, but the tenants are not convinced that's going to be enough. There have been some very heated conversations lately as Disney tries to manage expectations with the long term tenants (Patina Group, Brennan's & Lego were mentioned specifically).
Downtown Disney in its currently shrunken footprint east of the Lego Store will survive, it will reopen, and most of its tenants will cling to life in one form or another. Although TDA is realizing that at least a few locations may not make it to September/October timeframe. Apparently the minor attempt to repopulate the abandoned west end of the mall was shelved, along with nearly every other Disney project in North America. It should be interesting to watch to see who makes it and who doesn't at Downtown Disney over the next six months.
The same conversation dealt with GardenWalk, and that is just a disaster for everyone. JW Marriott has no known opening date, even though the Bonvoy.com site will let you book a room there starting in mid July when Disneyland was going to reopen. GardenWalk is on much shakier footing than Downtown Disney obviously, and will be troubled for the next several years. Expect another foreclosure auction on the property by 2021.
It should also be noted that this basic concept of economic destruction and financial despair is not exclusive to the Anaheim Resort District. Every other Class A dining/retail development in OC is hurting very badly; Pacific City, Fashion Island, South Coast Plaza, Irvine Spectrum are all in very dire straits and are now beginning to lose tenants at an increasing clip.
At some point it all stabilizes and regains financial footing, because OC is still an affluent county with 3.2 Million people who need to dine out somewhere at sometime. But the Anaheim Resort District and its two major malls are bearing the brunt of problems because they were so dependent on the tourist industry. And the tourism industry in Anaheim has at least a five month long full closure (March 14th to mid August?), followed by a reopening that will attract only 25% to 30% of its previous customer load when it does finally reopen. That just doesn't pencil out, even for the big boys.
