Mall of America falls behind on $1.4B mortgage

Delinquency poses threat to mortgage-backed bonds

TRD 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
Bed Bath & Beyond is planning to reopen 600 U.S. stores as states begin to wind down shelter-in-place orders. (Getty)

Bed Bath & Beyond to reopen 600 US stores

Bed Bath & Beyond to reopen 600 US stores
Hudson’s Bay CEO Richard Baker (Credit: Getty; iStock)

“Corporate shell game”: Special servicer says Hudson’s Bay undermined $850M loan

“Corporate shell game”: Special servicer says Hudson’s Bay undermined $850M loan
Daniel Kretinsky and a Foot Locker store (Credit: Getty)

Czech billionaire who bought Macy’s stake just acquired 6% of Foot Locker

Czech billionaire who bought Macy’s stake just acquired 6% of Foot Locker
Lacoste USA’s chief financial officer Karine Sansot-Vincent and a Lacoste store in Soho, New York (Jimi Celeste/Patrick McMullan via Getty Images and Michael Brochstein/SOPA Images/LightRocket via Getty Images)

Game point: Lacoste USA is restructuring, renegotiating retail leases

Game point: Lacoste USA is restructuring, renegotiating retail leases
(Credit: Rob Kim/Getty Images, iStock)

April’s 16.4% drop in retail sales is worst on record

April’s 16.4% drop in retail sales is worst on record
Gov. Andrew Cuomo and block of closed businesses in the East Village neighborhood of Manhattan (Credit: Cuomo by John Lamparski/NurPhoto via Getty Images, Rob Kim/Getty Images)

State officials lay out rules for retailers reopening

State officials lay out rules for retailers reopening
Councilwoman Carlina Rivera introduced a measure that would protect restaurants and retailers from certain legal action. (Rivera by Erik McGregor/Pacific Press/LightRocket via Getty Images; background via Gary He/Getty Images))

New measure protects restaurants, retailers who violate leases

New measure protects restaurants, retailers who violate leases
Macerich’s Thomas O’Hern

Mall free fall: Macerich collects just 26% of April rent payments

Mall free fall: Macerich collects just 26% of April rent payments
arrow_forward_ios

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

Loading...