Starwood holds onto suburban mall after losing three others

Starwood Capital found a way out of losing a fourth Chicago-area shopping mall to lenders.

A Starwood venture negotiated a loan modification to let it hold onto the 868,000-square-foot Chicago Ridge Mall after the property’s $80 million mortgage was set to mature on July 6, Crain’s reported. Starwood had struggled to find new financing to pay off the mortgage due to the property’s declining value.

The lender, Atlanta-based Trimont Real Estate Advisors, agreed to the modification, meaning Starwood can keep the mall in the southern Cook County suburb of Chicago Ridge.

Starwood, a Miami Beach-based private equity firm, lost control of the Louis Joliet Mall in October, turning it over to its lender after defaulting on payments for the $85 million mortgage tied to the property. In June, Starwood lost the Arboretum of South Barrington after defaulting on a $67 million loan, two months after losing the Promenade Bolingbrook shopping center.

The Chicago Ridge mall’s net cash flow dropped to $6.69 million in 2020 from $12.48 million in 2016. While the property has a long way to go before full recovery, its performance improved last year with a net cash flow of $8.05 million.

After losing big-name tenants such as Carsons and Sears, the mall’s occupancy rate rose to 80 percent last year. Some of the retailers still in the mall include Bed Bath & Beyond, AMC, H&M, Michaels and Aldi.

The mall was worth a lot more when Starwood took out the $80 million mortgage on it in 2012. At the time, the property was appraised at $129.7 million, which would have been enough to cover the loan. Now it’s valued at $46 million, 58 percent of the mortgage balance.

Read more

Chicago

Starwood takes steep loss on Bolingbrook shopping center

— Victoria Pruitt