Nordstrom and Neiman Marcus may be closing stores across the country amid the pandemic, but at the Shops at Merrick Park in Coral Gables, the retailers appear to be in for the long haul.
Brookfield Property REIT owns the roughly 850,000-square-foot property at 358 San Lorenzo Avenue, which consists of a three-story open-air shopping center as well as a five-story office building.
The property opened in 2002, and was acquired by GGP and JPMorgan Asset Management two years later. Brookfield Property Partners, a subsidiary of Toronto-based Brookfield Asset Management, fully acquired GGP in 2018. Last fall, Brookfield bought out JPMorgan’s stake in Merrick Park with the help of a $390 million CMBS refinancing provided by Bank of America.
Loan documents associated with that securitization provide an inside look at the finances of the mall and office complex.
As of December, the Shops at Merrick Park was 96 percent leased to more than 90 retail and restaurant tenants and three office tenants. Nordstrom and Neiman Marcus have been open since 2002, and as anchor tenants pay significantly less rent per square foot than other tenants.
Average rent at the complex comes out to $46.40 per square foot. Excluding the 10 largest tenants, that figure more than doubles to $99 per square foot.
By total base rent, the largest tenant at Merrick Park is office tenant Bayview Asset Management, a mortgage investment firm that oversaw $14.9 billion in assets as of September 2019. Other major tenants include Related Companies’ Equinox Fitness Club and a seven‐screen Landmark Theatres.
According to servicer commentary, the landlord is planning to provide rent deferral to Neiman Marcus, which recently emerged from bankruptcy after shedding $4 billion of debt and closing stores, including its recently opened flagship in New York’s Hudson Yards. Before coronavirus, Merrick Park was home to the highest-performing Neiman Marcus in Brookfield’s portfolio, with over $86.9 million in gross sales.
The servicer also notes that Nordstom closed two other locations in South Florida, at Dadeland Mall and at Waterside Shops in Naples, which will have a positive impact on the retailer’s fully remodeled space at Merrick Park.
Over the summer, Brookfield began taking legal action against deadbeat tenants at the complex, suing the Diane Von Furstenberg store for more than $200,000 in unpaid rent and Irving Padron’s Submarket Realty for more than $94,000 in unpaid office rent.
Brookfield Properties recently moved to lay off 20 percent of its retail division, or about 400 employees. The cuts were made “to align with the future scale of our portfolio,” according to an internal document shared with CNBC.