Ben Ashkenazy’s Mall Lands Extension Despite Value Loss

Ben Ashkenazy has extended the loan on Beverly Connection mall by two years to July 2026 after the debt tied to the Los Angeles power center was stuck in special servicing for years due to delinquency, according to Morningstar Credit.

The shopping center was reappraised in December for $193 million, 26 percent below its appraised value at issuance about a decade earlier, according to Morningstar. In addition, the strip mall is worth less than the $260 million New York City-based Ashkenazy Acquisition purchased it for in 2014 from Vornado Realty Trust.

“The property has been recently appraised by a national firm on behalf of a lender well in excess of $300 million,” a spokesperson for Ashkenazy Acquisition said in a statement.

The two-story property at 100 North La Cienega Boulevard is still valued above the outstanding debt, a $210 million commercial mortgage-backed securities package from Citigroup in 2014, connected to it. Ashkenazy is a named sponsor on the debt backing the 340,000-square-foot mall.

The loan landed in special servicing in the summer of 2020, months after the pandemic was declared and led to a decline in foot traffic for retail. The mall’s net operating income plummeted to $10 million in December 2023 from $23 million a year earlier, Morningstar’s most recent data available shows. The property’s debt service coverage ratio is below 1, which means it is not raking in enough income to cover debt. Occupancy fell to 92 percent in 2023 from 98 percent at issuance.

Beverly Connection’s top tenant is Target, which has a 100,000-sqaure-foot lease that amounts to 30 percent of the mall and isn’t set to expire until 2029. Other top tenants include Marshalls, Ross and Saks Off Fifth. In March, Bloomingdale’s inked a lease for a 20,000-square-foot ground-level storefront set to open later this year.

“With robust leasing activity, The Beverly Connection is now at occupancy levels in excess of 95 percent to all national tenants,” Ashkenazy’s spokesperson said.

Los Angeles County retail vacancies continue to reach record-setting levels. The county has more than 19 million square feet of empty retail space, an 8 percent year-over-year increase, according to a second-quarter report from NAI Capital. That’s more than roughly 4 million square feet of vacant retail space than there was in the second quarter of 2020, months into the pandemic, “marking a historic peak,” according to the report.