Simon fails to pay off $159M Miami International Mall loan on maturity date

Indianapolis-based owner is hemorrhaging tenants as retail center’s occupancy dropped to 78% last year

Simon Fails To Pay Off $159M Miami International Mall Loan
Simon Property Group’s David Simon and Mark Silvestri with 1455 Northwest 107th Avenue (Simon Property Group, Google Maps, Getty)

Miami International Mall ‘s owner failed to pay off a $159 million debt that matured this month,  as the retail center faces sagging occupancy, according to Morningstar Credit. 

Simon Property Group, the Indianapolis-based real estate investment trust specializing in shopping malls, owns 303,000 square feet of Miami International Mall’s central component. Simon does not own the five big box stores that account for nearly 700,000 square feet in the mall at 1455 Northwest 107th Avenue in Doral.

A Simon spokesperson did not respond to an email requesting comment. 

The 10-year commercial mortgage-backed securities loan was transferred to a special servicer when the debt matured on Feb. 6, the Morningstar Credit report shows. Simon obtained the loan in 2014 from Barclays, which then transferred the mortgage to a pair of separate CMBS trusts. 

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Miami International Mall appears to be doing well financially, but the retail center is hemorrhaging tenants, Morningstar Credit found. Simon’s failure to pay off the loan could be tied to “flagging occupancy, which was reported at 78 percent in late 2023,” the report states. In the next 12 months, Miami International Mall will experience “significant lease rollover,” Morningstar Credit said. 

In addition to Miami International Mall, Simon also owns The Falls in south Miami-Dade County, Dadeland Mall in Kendall and Sawgrass Mills in Sunrise. The firm, led by Mark Silvestri and David Simon, also co-owns Aventura Mall in Aventura with Turnberry Associates.  

Miami International Mall is the latest South Florida indoor retail center facing loan trouble. In October, credit rating agency KBRA downgraded the bonds backing a $260 million CMBS loan secured by Pembroke Lakes Mall in Pembroke Pines.

The loan was also placed on a Morningstar Credit watchlist, raising doubts about mall owner Brookfield Property Partners’ ability to repay the interest-only loan by its maturity date in 2025. Pembroke Lakes Mall experienced a decline in net cash flow and a spike in the loan-to-value ratio, Morningstar Credit found. At the same time, Brookfield was facing a challenging lending climate should the company have sought to refinance the loan.