Saddled with $260M debt, Pembroke Lakes Mall could be in trouble: Morningstar

Brookfield Properties-owned retail site was 26% vacant last year

Brookfield Properties' Jared Chupaila and Pembroke Lakes Mall in Pembroke Pines (Brookfield Properties, LoopNet, iStock)
Brookfield Properties' Jared Chupaila and Pembroke Lakes Mall in Pembroke Pines (Brookfield Properties, LoopNet, iStock)

An exodus of tenants and diminished net cash flow could spell trouble for the owner of Pembroke Lakes Mall, which is saddled with a $260 million interest-only loan that is due in two years, according to a recent Morningstar report.

New York-based Brookfield Properties acquired Pembroke Lakes Mall in 2018 when the firm bought shopping mall real estate investment trust General Growth Properties. Brookfield’s retail group is led by CEO Jared Chupaila. The firm is a subsidiary of Brookfield Asset Management, one of the world’s largest alternative investment management companies with $688 billion in assets under management, according to a press release.

Completed in 1992, Pembroke Lakes Mall is at 11401 Pines Boulevard in Pembroke Pines.

Anchored by JCPenney, Dillard’s and Macy’s, the 748,818-square-foot mall performed poorly last year, failing to recover from the disruption caused by the pandemic, the Morningstar report states. Last year, Pembroke Lakes Mall’s occupancy dropped from 100 percent to 84 percent, and the retail property’s cash flow fell 23 percent below underwritten expenditures, Morningstar found.

“We are calculating a $67.8 million value deficiency on the loan,” the report states. “As a result, we believe it will be challenging to refinance the loan ahead of its August 2025 maturity barring a major performance improvement. The loan pays interest only for the full term.”

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In 2013, GS Mortgage Securities Trust provided the $260 million loan, which is secured by the leasehold interests of Pembroke Lakes Mall, the report states.

A Brookfield Properties spokesperson did not respond to email requests for comment.

Earlier this month, Round One Entertainment, a venue with a bowling alley, billiards and arcade games, moved into a 101,634-square-foot big box store previously occupied by Sears, according to Pembroke Lakes Mall’s website. Round One signed its lease in the fall of 2020. Other new tenants that recently opened at Pembroke Lakes are Bella Visage Cosmetics, Lovisa jewelry store and Victoria’s Secret.

In December, Brookfield Properties expanded its South Florida real estate holdings with the $187.7 million purchase of Solano at Miramar, a garden-style apartment community in Miramar.

In April of last year, the firm went private after parent company Brookfield Asset Management bought all of its shares in a deal worth $6.5 billion.

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