After skipping loan payments and now facing a multimillion-dollar lender foreclosure lawsuit, the owners of a 164,000-square-foot shopping center in Orland Park are giving up.
BlitzLake Partners and GW Properties have relinquished the property at 66 Orland Square, according to Crain’s, which cited a loan report from Bloomberg.
CMBS loan servicers recently filed a $13.9 million foreclosure suit against the owners, alleging they stopped making mortgage payments in May, Crain’s reported. The property, which includes Gizmo’s Fun Factory, Sky Zone Trampoline Park and Charter Fitness, is next to Orland Square, the largest shopping mall in the Chicago Southland.
There have been an increasing number of mall defaults and foreclosures from the effects of the pandemic, which continues to decimate brick-and-mortar retail.
In late May, two large Chicago-area malls owned separately by Simon Property Group and a KKR-led venture both missed debt payments. The retail properties involved were Gurnee Mills and Yorktown Center.
Chicago-area retail properties faced a delinquency rate of 29.6 percent on CMBS loans in August, according to Crain’s, up from 7.9 percent in February.
A similar scenario is playing out around the country.
Brookfield Properties, the nation’s largest mall operator, is 90 days past due on its $90 million loan for the Florence Mall in northern Kentucky; and Namdar Realty is three months behind on a $33 million loan that backs a 450,000-square-foot mall in Saginaw Township, Michigan.