Brookfield delinquent on $210M Northridge mall loan

Special servicer earlier agreed to Covid-related payment relief on Northridge Fashion Center

Brookfield CEO Brian Kingston and the Northridge Fashion Center at 9301 Tampa Avenue (Brookfield, Google Maps)
Brookfield CEO Brian Kingston and the Northridge Fashion Center at 9301 Tampa Avenue (Brookfield, Google Maps)

Another mall owned by Brookfield Property Partners has fallen behind on loan payments — this time in Northridge.

A $209.4 million commercial mortgage-backed securities loan on the Northridge Fashion Center has become 30 days delinquent for the first time, according to a report from Trepp. According to servicer commentary from September, the special servicer had previously agreed to provide Covid-tied relief for the property by allowing Brookfield to cover payments using reserve funds.

“Given the forbearance approval, it was surprising to see the loan flip to delinquent this month,” Trepp analysts wrote in Wednesday’s newsletter. The loan was not transferred to special servicing.

The two-story, 1.5 million-square-foot super-regional mall at 9301 Tampa Avenue is anchored by Macy’s and JCPenney, which are not part of the loan collateral. Former anchor Sears closed its store at the mall in January, according to Kroll.

Within the 644,000 square feet of retail space backing the CMBS loan, the largest tenants are Dave & Buster’s, Pacific Theatres, Ross Dress for Less, Forever 21 and Old Navy, according to Trepp.

Brookfield and Old Navy parent company Gap Inc. are suing each other over rent obligations at several malls, including the Northridge Fashion Center, with Gap arguing that the pandemic has made the core purpose of its leases “illegal, impossible, and impracticable.”

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Brookfield did not return a request for comment.

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GGP secured the refinancing for the shopping center from Wells Fargo Bank in 2011, and the 10-year debt — which is split across two CMBS deals — is set to mature next December. GGP was acquired by Brookfield in 2018.

As one of the country’s largest mall owners, Brookfield has seen many of its properties come under financial pressure due to the pandemic. A recent Trepp analysis found that Brookfield has expressed a willingness to give up the keys to several of its properties — in markets like Tucson, Arizona; Louisville, Kentucky; Las Vegas; and Grand Rapids, Michigan — to CMBS lenders.

But it hasn’t all been bad news.

Amid record-low interest rates, the mall owner recently secured a $475 million refinancing for the 2.2 million-square-foot Oakbrook Center near Chicago, as well as a $250 million refinancing for the 1.4 million-square-foot Mall in Columbia, between Washington D.C. and Baltimore. Both loans were securitized into single-asset CMBS deals.

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