Mall of America falls behind on $1.4B mortgage

Delinquency poses threat to mortgage-backed bonds

National /
May.May 21, 2020 10:00 AM
Mall of America in Minnesota (Farragutful via Wikipedia)

Mall of America in Minnesota (Farragutful via Wikipedia)

The country’s largest shopping mall has reportedly fallen behind on its $1.4 billion mortgage, posing a threat to the wider bond market.

The Mall of America in Minnesota, which features more than 500 stores across 2 million square feet, missed mortgage payments in both April and May, according to the Financial Times.

The mall has been shut since March because of the pandemic, and has reportedly notified its mortgage servicer, Wells Fargo, about hardship stemming from the closure.

Retailers across the country have been hit hard by the pandemic, which has led to mass store closures and layoffs. Earlier this month, Neiman Marcus, the anchor tenant at Related Companies’ luxury Hudson Yards mall, filed for bankruptcy. J. C. Penny, another major department store chain, filed for bankruptcy last week.

The pressure on retailers has implications for the commercial mortgage-backed securities market, which distributes loans through bonds.

The FT reports that upward of one in five loans bundled into commercial mortgage-backed securities are currently on “watch lists” that are recorded by mortgage-servicing companies.

Last month, Don Ghermezian of Triple Five Group — owner of Mall of America — said in an interview that “many malls will be headed into default” if they can’t secure federal assistance.

The mall is set to reopen in June. [FT] — Sylvia Varnham O’Regan


Related Articles

arrow_forward_ios
Covid surge dims enthusiasm for ICSC Vegas conference
Covid surge dims enthusiasm for ICSC Vegas conference
Covid surge dims enthusiasm for ICSC Vegas conference
Apple to open first Bronx store, 11 location in New York
Apple to open first Bronx store, 11th location in New York
Apple to open first Bronx store, 11th location in New York
Torchlight Investors CEO Daniel Heflin and 445 Fifth Ave (Google Maps, National Institute of Public Finance)
Harbor Group owes more money in Fifth Ave foreclosure suit, lender claims
Harbor Group owes more money in Fifth Ave foreclosure suit, lender claims
2307 Beverley Road in Flatbush, Brooklyn (Getty)
Sears closing up shop in New York City
Sears closing up shop in New York City
The Broadway location of Halloween Adventure (Facebook via New York Costumes / Halloween Adventure)
Halloween Adventure to vacate East Village home as retail condo hits market
Halloween Adventure to vacate East Village home as retail condo hits market
LVMH Chairman and CEO Bernard Arnault (right), Dacra CEO Craig Robins and the Louis Vuitton store in Miami’s Design District
Making it rain in Miami’s Design District
Making it rain in Miami’s Design District
Purchases across the country rose 0.7 percent in August, easily outpacing estimates by retail analysts. (iStock)
Big month for retail sales bodes well for landlords
Big month for retail sales bodes well for landlords
385 First Avenue and Ben Shaoul (Google Maps, Getty)
385 First Ave requiring Bitcoin for retail condo sales
385 First Ave requiring Bitcoin for retail condo sales
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...