Brookfield delinquent on $190M loan tied to Baltimore mall

CMBS loan on 1.2M sf retail center went into special servicing in August

National /
Nov.November 13, 2020 05:45 PM
Brookfield's  Brian Kingston and White Marsh Mall (Photos via Brookfield)

Brookfield’s  Brian Kingston and White Marsh Mall (Photos via Brookfield)

Troubles mount for mall owners around the country as an increasing number are skipping loan payments, with the threat of another wave of coronavirus cases potentially leading to new restrictions.

Brookfield Property Partners is over 60 days delinquent on a $190 million CMBS loan secured by White Marsh Mall in Baltimore, according to Trepp. The mall is among the largest in the Baltimore area, spanning over 1 million square feet.

Wells Fargo originated the loan in 2013; it is set to expire in May 2021.

Trepp noted that a “pre-negotiation letter” had been executed by the borrower and discussions were ongoing. Brookfield has not made a payment on the loan since July and the loan went into special servicing in August.

With over 100 shops, the mall was 96 percent leased as of June, according to Trepp. It was last appraised at $300 million in 2013, a year after the mall was renovated.

The mall lost one of its key anchor tenants earlier this year when Sears https://therealdeal.com/tag/sears/ shut down. This summer, Amazon announced it would sign a lease for part of the department store’s parking lot.

Some of White Marsh Mall’s other tenants include: H&M, Dave & Buster’s, Macy’s, Boscov’s and J.C. Penney.

Brookfield Property Partners parent company, Brookfield Asset Management, and Simon Property Group acquired J.C. Penney out of bankruptcy in a deal completed late last month. The retailer was an anchor tenant at a number of Brookfield and Simon malls.

Brookfield Property Partners became one of the largest mall owners in the country when it acquired Chicago-based GGP out of bankruptcy in 2018. But like most mall owners, the company has been battered by the pandemic. It reported a $135 million net loss in the third quarter, a sharp fall from the $870 million profit it reported during the same period last year.

In its retail division, Brookfield reported an uptick in rent collections. For the quarter, rent collections averaged 70 to 75 percent, up from 34 percent in the second quarter.

Brookfield did not return a request for comment.

Malls have been among the hardest hit by the pandemic. Traffic at the country’s largest malls dropped 51 percent in the first eight months of the year compared to last year, according to data from Placer.ai.

Earlier this month, mall owners CBL Properties and Pennsylvania REIT filed for Chapter 11 bankruptcy. CBL and PREIT focused largely on older malls, while Brookfield and Simon are more focused on newer properties.


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