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The biggest shopping center in the country, The Mall of America, has missed two months of payments on its $1.4 billion mortgage.
Retailers aren’t the only ones struggling to pay the bills.
The biggest shopping center in the country, The Mall of America, has missed two months of payments on its $1.4 billion mortgage, a sign of just how much retail real estate owners are reeling during the coronavirus pandemic.
The mall, operated by private developers Triple Five Group, skipped mortgage payments in April and May, according to Trepp, a New York-based research firm that tracks the commercial mortgage-backed securities, or CMBS, market.
A spokesperson for Triple Five Group did not immediately respond to CNBC’s request for comment.
Mall of America closed its doors because of the Covid-19 crisis on March 17. It has now notified notified Wells Fargo, the master servicer that is overseeing its mortgage, of the “hardships” it faces. But it is not clear if Triple Five Group will seek forbearance on its loan.
Mall of America, located in Bloomington, Minnesota, is planning to reopen its retail stores on June 1, according to its website.
“Next to hotel owners, retailers have been the hardest hit by the Covid-19 crisis,” Manus Clancy, Trepp senior managing director, told CNBC. “The percentage of delinquent retail loans has already surpassed the highest percentage reached during the financial crisis and could be headed higher.”
Mall of America- and American Dream-owner Triple Five Group had previously told CNBC that it was concerned about some of its tenants not paying rent, which was going to hinder its ability to make mortgage payments.
American Dream co-CEO Don Ghermezian told CNBC in an interview in early April: “The difficulty we are going though now ... if tenants don’t want to pay rent, my response is: ‘I have got to pay a mortgage. I borrowed money. I have got to pay back my lenders.’”
If there is not more assistance to come from the federal government on this front, “many malls will be headed into default because they won’t be able to make mortgage payments going forward,” he said at the time.
Mall of America is not alone in this scenario, either. A number of malls are missing mortgage payments, and particularly those in the CMBS market.
As of the start of this week, Trepp said the percentage of CMBS loans categorized as 30 or more days delinquent for the retail sector was 10%. And those loans in a grace period, meaning a payment could still potentially be made, was 13.6%, Trepp said.
“We’re starting to see forbearances coming in,” Clancy said.
The FT first reported on the Mall of America delinquency.
In training to be an obedient master to my two labs
Shooting, fishing and hunting
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Joined: Feb 2005
Posts: 4,421
Campfire Tracker
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Campfire Tracker
Joined: Feb 2005
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Hope they been payin’ their insurance.
"Those that think they know everything are annoying those of us that have Google." - Dr. D. Edward Wilkinson
Note to self: Never ask an old Fogey how he is doing today. Revised note to self: Keep it short when someone asks how I am doing.
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Joined: Nov 2003
Posts: 28,411
Campfire Ranger
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Campfire Ranger
Joined: Nov 2003
Posts: 28,411 |
Hope they been payin’ their insurance. Read your policies, Mike. Most specify no coverage for damages caused by war, riots or insurrections.
The degree of my privacy is no business of yours.
What we've learned from history is that we haven't learned from it.
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Joined: Dec 2010
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Campfire Outfitter
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Campfire Outfitter
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ya my company just decided not to renew the lease on our building. problem is now i have to get all kinds of schit out of it in 3 weeks. i got a feeling that a lot of tech companies will do the same thing.
My diploma is a DD214
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Joined: Jul 2015
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Campfire Outfitter
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Campfire Outfitter
Joined: Jul 2015
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When you don't pay your mortgage, you have a problem.
When Mall of America doesn't pay it's mortgage, the bank has a problem.
Politics is War by Other Means
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Joined: Mar 2004
Posts: 20,827
Campfire Ranger
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Campfire Ranger
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Posts: 20,827 |
I can't remember the last time I shopped in a mall.... roving bands of "youths".... potential contact with sick people..... aside from fresh produce/meats my friend in the big brown truck delivers 85% of what I buy today..... I have a hunch the mega shopping malls are going to go the way of hitching posts....
Please don't feed the trolls!
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Posts: 11,756
Campfire Outfitter
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Campfire Outfitter
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Been there couple times since it opened. And I lived 25 miles from it. I’m sure I’ll never go back.
NRA Patron
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Joined: Jan 2001
Posts: 30,760
Campfire 'Bwana
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Campfire 'Bwana
Joined: Jan 2001
Posts: 30,760 |
I can't remember the last time I shopped in a mall.... roving bands of "youths".... potential contact with sick people..... aside from fresh produce/meats my friend in the big brown truck delivers 85% of what I buy today..... I have a hunch the mega shopping malls are going to go the way of hitching posts.... Go Brown........... what's a mall ??
T R U M P W O N !
U L T R A M A G A !
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Campfire Savant
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Campfire Savant
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Campfire Tracker
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Correction:
Mall of Africa,
just sayin...
When its time to fight, you fight like you are the third monkey on the ramp to get on Noah's Arc... and brother, it is starting to rain!
The chair is against the wall.
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Campfire Outfitter
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Been there one time Jan 1992 Seemed good, back then Won’t be back
if a man speaks, and there isn't a woman around to hear him, is he still wrong?
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Campfire Sage
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Campfire Sage
Joined: Aug 2007
Posts: 115,424 |
I like how the media pretends this is news.
WTF did everyone think would happen when nobody could work?
Can't make this fuggin' schit up.
Trump being classless,tasteless and clueless as usual. Sorry, trump is a no tax payin pile of shiit. My young wife decided to play the field and had moved several dudes into my house
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Campfire Kahuna
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Campfire Kahuna
Joined: Jan 2001
Posts: 59,140 |
Hard to pay bills when the gov't shuts down your business... I like how the media pretends this is news.
WTF did everyone think would happen when nobody could work?
Can't make this fuggin' schit up. Sure can't....
Ex- USN (SS) '66-'69 Pro-Constitution. LET'S GO BRANDON!!!
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Joined: Nov 2003
Posts: 67,694
Campfire Kahuna
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Campfire Kahuna
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Posts: 67,694 |
Mall shopping was a paradigm shift in shopping. Along came stand alone big box stores, and then outdoor settings, almost park, or campus like, with huge numbers of big boxes. Now, home delivery is a big thing. Retail has always been in flux. Mom and pop private stores are really becoming rare. Business agility will save some mall retail companies. Many will fail. That’s just the way it is.
Sam......
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Posts: 5,638
Campfire Tracker
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Campfire Tracker
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Maybe they should move the riots there and then all the store owners can file insurance claims. Win win.
My biggest fear is when I die my wife will sell my guns for what I told her they cost.
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Joined: Jul 2015
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Campfire Outfitter
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Campfire Outfitter
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Insurance doesn't cover riots.
Politics is War by Other Means
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Campfire Tracker
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Maybe they should move the riots there and then all the store owners can file insurance claims. Win win. Damage caused by disgruntled looters and thieves is not covered under any insurance policy I ever heard of. Your business gets looted & burned, you are SOL.
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Campfire Regular
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Campfire Regular
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Maybe they should move the riots there and then all the store owners can file insurance claims. Win win. Damage caused by disgruntled looters and thieves is not covered under any insurance policy I ever heard of. Your business gets looted & burned, you are SOL. If you have a acts of terrorism rider it does but most small business don't carry it.
Music washes away the dust of everyday life Some people wait a lifetime to meet their favorite hunting and shooting buddy. Mine calls me dad
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Campfire 'Bwana
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Campfire 'Bwana
Joined: Apr 2004
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Correction:
Mall of Africa,
just sayin... ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ This^^^^^^^^^^^^^^^^^
"Minus the killings, Washington has one of the lowest crime rates in the Country" Marion Barry, Mayor of Wash DC
“Owning guns is not a right. If it were a right, it would be in the Constitution.” ~Alexandria Ocasio Cortez
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Campfire Ranger
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Campfire Ranger
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I like how the media pretends this is news.
WTF did everyone think would happen when nobody could work?
Can't make this fuggin' schit up. Everything will be just fine when all the businesses open back up and all those post riot new opportunities for a better life emerge. Oh wait...
"Hey jackass, get your government off my freedom." MOLON LABE
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