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
Jeffrey Soffer and Fontainebleau Miami Beach (Getty)

Fontainebleau Miami Beach’s $1B loan exits special servicing

Fontainebleau Miami Beach’s $1B loan exits special servicing
Southland Mall, 20505 South Dixie Highway in Cutler Bay with JLL's Tom Hall and Danny Finkle (Google Maps, JLL)

Southland Mall’s troubled $65M CMBS loan for sale

Southland Mall’s troubled $65M CMBS loan for sale
Westfield Broward mall, CEO Christophe Cuvillier

Westfield Broward mall’s $95M CMBS loan heads to special servicing

Westfield Broward mall’s $95M CMBS loan heads to special servicing
Clevelander South Beach

Party’s over: Clevelander South Beach closes after employee tests positive for Covid

Party’s over: Clevelander South Beach closes after employee tests positive for Covid
Southland Mall in Cutler Bay, Hazem Ben-Gacem, Investcorp’s Co-Chief Executive Officer (Credit: Google Maps)

Wells Fargo says mismanagement by Southland Mall owner contributed to downfall

Wells Fargo says mismanagement by Southland Mall owner contributed to downfall
Southland Mall in Cutler Bay

Wells Fargo seeks to foreclose on Southland Mall in Cutler Bay

Wells Fargo seeks to foreclose on Southland Mall in Cutler Bay
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
arrow_forward_ios

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

Loading...