Southland Mall’s $65M loan heads back to special servicing

South Florida’s retail market has a CMBS outstanding loan balance of $6.3 billion

Miami /
May.May 04, 2020 12:33 PM
Investcorp CEO  Hazem Ben-Gacem and Southland Mall (Credit: Google Maps)

Investcorp CEO Hazem Ben-Gacem and Southland Mall (Credit: Google Maps)

Southland Mall’s $65 million loan is heading back to special servicing, after the Cutler Bay shopping center said that most of its tenants were not likely to be able to make their rent payments due to the effects of coronavirus.

The commercial mortgage-backed securities loan for Southland Mall at 20505 South Dixie Highway went into special servicing on April 3, which allows the mall to restructure and rework its debt, according to the data provider Trepp. The loan was originally for $67.5 million but has a current balance of $65.1 million.

The mall’s tenants include J.C. Penny, TJ Maxx, Regal Cinemas and LA Fitness. It has asked its servicer KeyBank, for relief, according to Trepp. The mall, however, is not delinquent on its payments and has made its April payment, according to Trepp.

This isn’t the first time the mall, which is owned by private equity firm Investcorp, has had issues with its loan. In 2018, the $67.5 million loan was transferred to special servicing and the borrower extended the maturity date until May 2019. Two of the mall’s large tenants have left in the past few years: K-Mart in 2017 and Sears earlier this year.

Southland Mall, formerly known as the Cutler Ridge Mall, opened in 1960. It was renovated in 2005.

Retailers have been hit hard by coronavirus as most stores have been forced to shut down. J.C. Penny is reportedly exploring bankruptcy options after closing 850 of its department stores, according to Reuters.

CMBS loans are secured by a mortgage on a commercial real estate property. The loan is accumulated into a pool of loans and sold as bonds to investors.

When the borrower misses a payment or requests modifications, CMBS loans are taken over by a third-party firm known as a “special servicer.” By entering special servicing, the CMBS loan can be reworked or restructured, or the special servicer can find another operator to take over the property. Industry experts say that modifying CMBS loans can take months or years, and during that time the borrower cannot refinance or take on additional debt.

CMBS loans are often deemed riskier than conventional loans because of the difficulty in modifying them due to obligations the borrower has with bondholders.

South Florida’s retail market has an outstanding CMBS loan balance of $6.3 billion, according to data provided by Trepp.

Last month, a $975 million CMBS loan for Jeffrey Soffer’s Fontainebleau Miami Beach entered special servicing, but was not in default. The loan is the largest CMBS hotel loan in South Florida.


Related Articles

arrow_forward_ios
Electra America managing partner Joe Lubeck and Southland Mall at 20505 South Dixie Highway in Cutler Bay (Google Maps, Electra America)
JV pays $100M for Southland Mall, eyes mixed-use redevelopment
JV pays $100M for Southland Mall, eyes mixed-use redevelopment
From left: Pedro Villar, owner of Aloft Miami Brickell, along with his attorney Joe Pack (Newstar Media)
Aloft Miami-Brickell exits bankruptcy, staves off foreclosure
Aloft Miami-Brickell exits bankruptcy, staves off foreclosure
Elliot Stone of Royal Castle Companies (FIU Foundation, LoopNet)
Royal Castle Companies buys offices at Boca’s Park at Broken Sound
Royal Castle Companies buys offices at Boca’s Park at Broken Sound
Cross County Plaza (Madison Properties)
West Palm shopping center foreclosure suit leads to CMBS drama
West Palm shopping center foreclosure suit leads to CMBS drama
Partnership gone wrong? Receiver takes over Miami Beach hotel following alleged hostile takeover by an ex-partner
Partnership gone wrong? Receiver takes over Miami Beach hotel following alleged hostile takeover by an ex-partner
Partnership gone wrong? Receiver takes over Miami Beach hotel following alleged hostile takeover by an ex-partner
Pedro Villar of Sunview Companies with the hotel (Marriott, LinkedIn via Villar)
Owner of Aloft Miami Brickell hotel files for bankruptcy
Owner of Aloft Miami Brickell hotel files for bankruptcy
The Holiday Inn at 340 Biscayne Boulevard in Miami and attorney Linda Worton Jackson
Bankruptcy could lead to redevelopment of downtown Miami Holiday Inn
Bankruptcy could lead to redevelopment of downtown Miami Holiday Inn
Southland Mall in Cutler Bay (Google Maps)
Lender takes control of struggling Southland Mall in Cutler Bay
Lender takes control of struggling Southland Mall in Cutler Bay
arrow_forward_ios

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

Loading...