Brookfield lands $475M refi on Oakbrook Center

Morgan Stanley provided debt on 2M sf mall, whose tenants include AMC and Neiman Marcus

Oakbrook Center and Brookfield's Brian Kingston (Oakbrook Center)
Oakbrook Center and Brookfield's Brian Kingston (Oakbrook Center)

A Brookfield Property Partners venture has secured a $475 million refinancing of the second-largest shopping mall in the Chicago area.

Morgan Stanley provided the debt package on the 2.2-million-square-foot Oakbrook Center, according to Crain’s. An affiliate of the California Public Employees’ Retirement System owns the mall with Brookfield.

The debt includes a $319 million mortgage and a $156 million mezzanine loan. That pays off the $425 million existing loan, with a portion of the remaining amount to be used for upgrades on the sprawling space, Crain’s noted, citing a Fitch Ratings report.

The debt package is the largest refinancing of a Chicago-area commercial property since June 2018. That’s when the owners of the Aon Center office tower in downtown Chicago took out a $678 million loan, according to Real Capital Analytics.

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A spokesperson for Brookfield Retail Properties, which manages Brookfield’s mall portfolio, declined to comment.

Malls have been pummeled by the pandemic, along with the larger retail industry. An increasing number of mall owners are falling behind on their loans, and some have given up. Starwood Retail Partners is handing over the keys to Louis Joliet mall to its lender, after first defaulting on a loan payment in the spring.

Oakbrook Center is surrounded by wealthy residential neighborhoods and suburban offices, but has problems of its own. Its tenant roster includes several struggling retailers like Macy’s, Neiman Marcus, Victoria’s Secret, AMC movie theater and The Gap. The mall is 82 percent occupied, and tenants paid 80 percent of rent due in September, according to the report, citing Fitch. Brookfield has allowed its struggling tenants, including AMC, to defer their rent.

[Crain’s] — Akiko Matsuda

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