Malls dying slower death than some investors anticipated

CMBS loans tied to malls aren’t defaulting as quickly as short-sellers would like

TRD MIAMI /
Jan.January 10, 2018 10:30 AM

Vacant mall

The bell tolls for traditional retail malls, but investors betting against debt in the sector haven’t seen the gains some thought they’d see by now.

Amid increasing competition from online retailers, shifting consumer trends, and empty malls, investors have looked to the CMBX 6, a credit default swap index that tracks bonds backed by mortgages on malls among other properties. Yet, so far only four loans tied to the index have incurred a total of $4.3 million in losses, according to the Wall Street Journal.

Nationwide, malls certainly aren’t doing well by any stretch, but they at least appear to be dying a bit of a slower death. Some landlords have refinanced debt, others have found traditional replacement tenants, and some reinvented their properties for “experiential” tenants.

Some portions of the CMBX 6 has offered some opportunities for short-sellers, though. The parts of the index rated BB and BBB- drooped 12.1 percent and 9.5 percent, respectively in 2017, according to the Journal.

There are more opportunities for those willing to wait. A report by Alder Hill Management, a New York-based investment firm, predicted that 26 out of the 40 loans tied to mall properties on the CMBX 6 would default by 2022. [WSJ] – Dennis Lynch


Related Articles

arrow_forward_ios
27359 South Dixie Highway and Longpoint Realty Managing and Founding Partner Dwight Angelini (Google Maps)

Longpoint buys Fresco Y Mas-anchored center in Naranja

Longpoint buys Fresco Y Mas-anchored center in Naranja
Hard Rock Cafe at Bayside Marketplace (Hard Rock)

Bayside Marketplace sues to evict Bubba Gump, Hard Rock Cafe and three other tenants

Bayside Marketplace sues to evict Bubba Gump, Hard Rock Cafe and three other tenants
Commissioner Ricky Arriola and an aerial of Sunset Harbour in Miami Beach (Compass)

Miami Beach moves toward banning chain restaurants and stores in Sunset Harbour

Miami Beach moves toward banning chain restaurants and stores in Sunset Harbour
Diane Von Furstenberg, Brookfield Properties Bruce Flatt, and the DVF store in the Shops at Merrick Park (Getty, Google Maps)

Brookfield seeks to evict Diane Von Furstenberg at Merrick Park

Brookfield seeks to evict Diane Von Furstenberg at Merrick Park
Rendering of American Dream Miami, Triple Five Group chairman Nader Ghermezian

Triple Five “inching closer” to construction on American Dream Miami

Triple Five “inching closer” to construction on American Dream Miami
4402-4678 North University Drive, Todd Nepola

Miami Beach parking lot mogul sells retail center in Lauderhill for $13M

Miami Beach parking lot mogul sells retail center in Lauderhill for $13M
Mitchell Kaplan and Books & Books at 927 Lincoln Road (Google Maps) 

Books & Books closes its chapter on Lincoln Road

Books & Books closes its chapter on Lincoln Road
Diesel USA and Original Penguin Lincoln Road stores skipped April and May rent payments: lawsuit

Diesel USA and Original Penguin Lincoln Road stores skipped April and May rent payments: lawsuit

Diesel USA and Original Penguin Lincoln Road stores skipped April and May rent payments: lawsuit
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...