Shares of some mall and strip center REITs - such as Regency Centers (REG), Brixmor Property (BRX), Retail Properties (RPAI) and Simon Property (SPG) - are under pressure on Thursday following a news report saying Cheesecake Factory (CAKE) will not make upcoming rent payments for any of its locations on April 1 due to significant loss of income stemming from the COVID-19 pandemic.

CHEESECAKE NOT PAYING RENT ON APRIL 1: The Cheesecake Factory said it will not make upcoming rent payments for any of its locations on April 1 due to significant loss of income stemming from the COVID-19 pandemic, Eater's Matthew Kang reported. The company told all of its landlords in a letter dated March 18 that a steep decline in restaurant traffic has taken a toll on its cash flow and "inflicted a tremendous financial blow" to business, Kang added.

The restaurant chain's affiliated restaurants, such as Rock Sugar and North Italia, will also not make April 1 rent payments, the author noted. Company chairman and CEO David Overton said, "Due to these extraordinary events, I am asking for your patience, and frankly, your help." He continued, "we appreciate our landlords' understanding given the exigency of the current situation."

Cheesecake Factory operates 294 restaurants in 39 states, plus District of Columbia, Puerto Rico, and Toronto, Canada. Most of the company's landlords are malls, including Simon and Westfield.

WHAT'S NOTABLE: On Monday, Cheesecake Factory provided a business update related to the impact of COVID-19. All of the company's restaurants have transitioned to an off-premise operating model as required by state and local officials. Currently, 27 locations across the company's concepts, including two The Cheesecake Factory restaurants, are temporarily closed. In addition, the company drew an additional $90M on its revolving credit facility to increase its cash position. The company has also curtailed its planned unit growth for the year and is evaluating additional measures to further preserve financial flexibility.

Given the uncertainty associated with the rapidly evolving COVID-19 situation, the company also withdrew its first quarter and fiscal 2020 financial guidance provided on its fourth quarter fiscal 2019 conference call and in its Annual Report on Form 10-K for the year ended December 31, 2019.

PRICE ACTION: In morning trading, shares of Cheesecake Factory have dropped about 2% to $18.46. Also lower, Simon Property, Retail Properties and Regency Centers have slipped about 2% each.