Investcorp wants out of struggling Southland Mall

Southland Mall’s $65M CMBS loan went into default in April

TRD MIAMI /
May.May 21, 2020 12:30 PM
Jamie Dimon of JPMorgan, Southland Mall and Investcorp co-CEOs Rishi Kapoor (top) and Hazem Ben-Gacem (Credit: Getty; Southland; Investcorp)

Jamie Dimon of JPMorgan, Southland Mall and Investcorp co-CEOs Rishi Kapoor (top) and Hazem Ben-Gacem (Credit: Getty; Southland; Investcorp)

As retail continues to be battered by coronavirus, one South Florida mall owner has given up seeking relief and is now trying to hand the keys over to its lender.

The owner of Southland Mall in Cutler Bay is attempting to turn the property over to JPMorgan Chase after most of its retail tenants claimed they could not pay April rent, according to the data provider Trepp.

Southland Mall’s $65 million commercial mortgage-backed securities loan went into special servicing in early April and is now in default, according to Trepp. Its owner, private equity firm Investcorp, initially asked its special servicer KeyBank for relief, but now believes the property will be “unsustainable,” according to Trepp. Investcorp declined to comment.

Malls and retailers across the country are being ravaged by the impacts of coronavirus, which have led to closures and stay-at-home orders. Large national retail chains like J.C. Penney, J. Crew and Neiman Marcus are seeking to restructure through bankruptcy.

One of Southland Mall’s tenants is J.C. Penney. Its other large anchor tenants include TJ Maxx, Regal Cinemas and LA Fitness. Southland Mall, at 20505 South Dixie Highway and formerly known as Cutler Ridge Mall, opened in 1960. It was renovated in 2005.

The mall has had trouble with its loan in the past. In 2018, its $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. The loan now has a balance of $65.1 million.

More properties in South Florida that were financed through CMBS loans could be turned over to lenders in the coming weeks and months, experts say.

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.


Related Articles

arrow_forward_ios
Seritage Growth Properties stopped construction at Esplanade at Aventura because of the pandemic, and now Mexican restaurant Carolo wants to break its lease.

Esplanade at Aventura work stoppage leads to lawsuit by Mexican restaurant

Esplanade at Aventura work stoppage leads to lawsuit by Mexican restaurant
Investcorp CEO Hazem Ben-Gacem and Southland Mall (Credit: Google Maps)

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

Southland Mall’s $65M loan heads back to special servicing
Dave Folsom, president & CEO of Sotherly Hotels, and the DoubleTree Resort by Hilton Hollywood Beach at 4000 South Ocean Drive (Credit: Google Maps)

Hollywood DoubleTree’s $59M CMBS loan enters special servicing

Hollywood DoubleTree’s $59M CMBS loan enters special servicing
Clockwise from top left: 10800 Pines Boulevard, 701 Lincoln Road and 8888 Southwest 136th Street (Credit: Google Maps)

Struggling SoFla retail market faces $6B in CMBS payments

Struggling SoFla retail market faces $6B in CMBS payments
Philip Procacci, 11430 Northwest 20th Street and 11410 Northwest 20th Street (Credit: Google Maps)

Procacci sells two office buildings near Dolphin Mall for $29M

Procacci sells two office buildings near Dolphin Mall for $29M
Fontainebleau Miami Beach (Top), Diplomat (Left), and Boca Raton Resort (Right)

SoFla hotels face $4B CMBS debt exposure

SoFla hotels face $4B CMBS debt exposure
Mayor, Miami-Dade County, Carlos A. Giménez (Credit: Ryan Holloway/ Armando Rodriguez Miami-Dade County Photographers)

Miami-Dade orders all non-essential businesses closed due to coronavirus

Miami-Dade orders all non-essential businesses closed due to coronavirus
Rendering of Life Time’s resort at The Falls

Luxury athletic resort to take over Bloomingdale’s space at The Falls

Luxury athletic resort to take over Bloomingdale’s space at The Falls
arrow_forward_ios

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

Loading...