American Dream lost $60M in 2021

Mall owner still seeking extension to repay construction debt

Tri-State /
May.May 04, 2022 10:00 AM
Don Ghermezian, CEO, Triple Five Group, in front of the American Dream Mall in East Rutherford (Triple Five Group, American Dream Mall, iStock)

Don Ghermezian, CEO, Triple Five Group, in front of the American Dream Mall in East Rutherford (Triple Five Group, American Dream Mall, iStock)

The previous year didn’t wake up the American Dream mall owner from the financial nightmare it’s enduring.

The New Jersey mall lost roughly $60 million in 2021, according to a securities filing reported by Bloomberg. The mall generated about $173 million in revenue last year, but expenses totaled more than $232 million for the beleaguered retail hub.

The mall recorded $305 million in sales last year, well below the $2 billion initially forecasted for the property’s first year of operations. Meanwhile, the mall has $2.6 billion in liabilities versus $500 million in equity.

The mall’s owner has been scrambling in recent months for an extension to repay a debt. Bloomberg reported in February Don Ghermezian’s Triple Five Group was asking for a four-year extension to pay off $1.7 billion in construction financing. The loans came from a group including JPMorganChase, encompassing a $1.2 billion senior loan and $475 million mezzanine loan due to be repaid last year.

Triple Five has been trying to dodge bankruptcy at the mall and entertainment complex. The property has about $290 million of municipal bonds and $800 million of municipal debt backed by payments in lieu of taxes.

The mall needed to take $9.3 million in February from a reserve account to make a debt payment. At the time, a securities filing showed only $820 left in the account; the next payment is due Aug. 1.

The mall has struggled since opening in 2019. Retail stores didn’t open until October 2020, in the midst of the pandemic. Cash flow problems have led senior construction loan holders to take minority stakes in other Triple Five properties, including the Mall of America and the West Edmonton Mall.

Despite the struggles, there are some new developments on the way for the American Dream. The ski slope in the mall, which was damaged by a fire in September, is expected to reopen around Memorial Day. Additionally, Forbes reported Apple plans to open a flagship store at the mall, expected to open by the end of the year.

[Bloomberg] — Holden Walter-Warner





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