The owners of Dallas’ NorthPark Center have scored a major refinancing deal for the Metroplex’s largest mall.
J.P. Morgan Asset Management and North Park Management Company received a $650 million mortgage for the 1.9 million-square-foot mall, according to a Fitch Ratings report on the debt.
A lender group led by Barclays originated the loan and packaged it into commercial mortgage-backed securities, to be sold off to investors.
The debt will be used to refinance $487 million in existing loans on the property. The funding will also return $139 million in equity to the borrower and fund a contractual leasing cost escrow of $17 million and cover closing costs.
The two-year loan has a floating interest rate and three one-year extension options. The securitization deal is expected to close on March 15.
The owners plan to invest $71.4 million in capital improvements at the mall over the next five years.
The north Dallas mall, at Central Expressway and Northwest Highway, was originally built in 1965 and was expanded over time.
Its top tenants include Dillards, Macy’s, Neiman Marcus and Nordstrom. NorthPark is also home to a 15-screen AMC theater and an Eataly location. In addition to an impressive portfolio of luxury stores, the mall includes a Dallas Public Library branch and is known for its collection of more than 50 works of fine art. The property is about 96 percent leased. In the past three years, 10 tenants have renewed or extended their leases.
While the Great Recession and the pandemic decimated many malls nationwide, NorthPark Center continues to out-perform its peers. A recent Green Street Advisors survey estimated average mall sales were $607 per square foot in the third quarter of 2023, the Fitch report said. NorthPark Center’s sales between October 2022 and October 2023 averaged $845 per square foot.
Despite economic pessimism surrounding American malls, this kind of activity shows institutional lenders have faith in properties like NorthPark Center.
Toronto-based Brookfield Properties scored a similar refinancing deal in September for a 2.6 million-square-foot Chicago-area mall. That $700 million loan allowed Brookfield to pay off $475 million in existing debt on the property.
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