Woodfield Mall owners net $294M refinancing by putting up cash

Venture of Simon Property Group and Institutional Mall Investors had to cough up $88M to retire previous $374M loan

Woodfield Mall Owners Secure $294M Refinancing Deal
Simon Property Group's David Simon with Woodfield Mall (Simon Property Group, Google Maps, Getty)

The landlords of Illinois’ largest mall sidestepped a tough lending climate to secure a huge loan on its northwest suburban asset, but the firms had to pay a pretty penny to lock down the deal. 

A joint venture of Simon Property Group and Institutional Mall Investors refinanced the Woodfield Mall in Schaumburg with a $294 million mortgage from Barclays Capital, Bank of America and Bank of Montreal, CRE Direct reported.

However, the owners had to cough up nearly $88 million to retire a previous $374.4 million loan with a 4.5 percent interest rate that was set to mature in March. The original mortgage was provided by PGIM Real Estate and Northwestern Mutual Life Insurance.

The new 10-year loan, which requires interest-only payments throughout its term before a balloon for the principal and remainder comes due at maturity, carries an interest rate of 6.85 percent.

Even though large suburban retail properties have struggled amid a spike in e-commerce following the pandemic, institutional lenders are still showcasing faith in such properties, hinting at a possible recovery for the Chicago area’s regional malls.

In another large refinancing deal, Brookfield Properties secured a $700 million loan two months ago, allowing the Toronto-based firm to pay off $475 million in debt on the 2.6 million-square-foot Oakbrook Center mall. Institutional Mall Investors was also involved in that deal, being that it’s an investment partner with Brookfield, and the owners were able to pocket more than $200 million with the deal.

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Simon Property Group had acquired a 50 percent stake in the Woodfield Mall in 2013 through an exchange with Institutional Mall, a joint venture of Miller Capital Advisory and the California Public Employees’ Retirement System. Institutional Mall initially acquired the property in 2012, having previously owned it in a venture with General Motors Pension Trust.

A portion of the $294 million loan is set to be part in an upcoming commercial mortgage backed security offering that allows investors to buy debts secured by the Woodfield Mall and other commercial properties.

The mall, situated on a 133-acre site, is nearly 96 percent leased and spans 2.15 million square feet. Anchor tenants include Macy’s, JCPenney, Sears, Primark, Level 257 and Lord & Taylor, which cumulatively occupy about half of the property.

— Quinn Donoghue

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