Simon Property, KKR skip mortgage payments on Chicago malls

Simon’s 2M sf Gurnee Mills and KKR’s 1.4M sf Yorktown Center both remain closed

TRD CHICAGO /
May.May 28, 2020 10:45 AM
Simon Property CEO David Simon and Gurnee Mills, and KKR co-CEO George Roberts and Yorktown Center (Getty, Wikipedia, KKR, Yorktown Center)

Simon Property CEO David Simon and Gurnee Mills, and KKR co-CEO George Roberts and Yorktown Center (Getty, Wikipedia, KKR, Yorktown Center)

As the coronavirus crisis turbocharged the retail apocalypse, mall owners across the country have been falling behind on their mortgage payments. Even The Mall of America in Minnesota, the country’s largest retail center, missed recent payments on its $1.4 billion loan.

Now, two large Chicago-area malls owned separately by Simon Property Group and a KKR-led venture, both missed May debt payments, according to Crain’s. The retail properties, Gurnee Mills and Yorktown Center, are both closed because of pandemic restrictions though Yorktown Center is set to open this weekend.

Simon skipped its $1.3 million May payment on the $257 million mortgage for Gurnee Mills; and the KKR venture with Pacific Retail Capital Partners missed its $333,000 payment on a $107 million mortgage for Yorktown Center, according to Crain’s. Both are CMBS loans.

Simon has reopened nearly 50 malls around the country in recent weeks.

Another area outlet, Louis Joliet Mall, missed April and May mortgage payments on an $85 million loan, according to the report.

The nearly 2 million-square-foot Gurnee Mills — among the Chicago-area’s largest shopping centers — was suffering in recent years after losing Sears and Toys “R” Us stores. And even before the coronavirus, the KKR venture had problems refinancing its mortgage on its 1.4 million-square-foot mall, Crain’s reported.

The coronavirus-caused stress on retailers — which has led to numerous bankruptcies in recent weeks — has implications for the commercial mortgage-backed securities market, which distributes loans through bonds. The Financial Times reported that 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. [Crain’s] — Alexi Friedman 


Related Articles

arrow_forward_ios
Vista Property principal Hymie Mishan, whose company is betting on the West Loop office market. (Images via Vista Property)

Vista Property plans 15-story office building in West Loop

Vista Property plans 15-story office building in West Loop
Chicago will direct $33 million to help renters and homeowners avoid eviction and foreclosure (iStock)

Chicago ups ante to help residents avoid eviction, foreclosure

Chicago ups ante to help residents avoid eviction, foreclosure
The former Target in Calumet City will be converted into a working farm (Google Maps)

For latest retail redevelopment, old Target will become new farm

For latest retail redevelopment, old Target will become new farm
(iStock)

Chicago’s office market hits ugly vacancy number

Chicago’s office market hits ugly vacancy number
The Chicago area is one of the most at-risk nationwide to rising home foreclosure rates, according to a recent report (iStock)

Treading water: Chicago housing market among most at-risk to foreclosure, report shows

Treading water: Chicago housing market among most at-risk to foreclosure, report shows
One Bennett Park’s Lawn Bowl, Optima Signature, and JeffJack Apartments

Privacy is the newest amenity

Privacy is the newest amenity
CCC Information Services’ CEO Githesh Ramamurthy and 167 North Green Street in Fulton Market. (Ramamurthy courtesy McKinsey & Company; 167GreenSt)

Corona cut: Software products firm trims lease space at Shapack’s 167 N. Green

Corona cut: Software products firm trims lease space at Shapack’s 167 N. Green
Sterling Bay’s Andy Gloor and Baird & Warner’s Steve Baird

Baird & Warner, Sterling Bay secured big PPP funds

Baird & Warner, Sterling Bay secured big PPP funds
arrow_forward_ios

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

Loading...