Mall of America no longer behind on $ 1.4 billion mortgage

The Mall of America changed the terms of its $ 1.4 billion mortgage and is up to date on the loan, after missing months of payments during the Covid crisis, stores temporarily closing and tenants failing paid the rent.

Triple Five Group, owner of the largest mall in the United States, began to miss mortgage payments in April, CNBC reported. But he struck a deal with the lenders, who have expressed “strong confidence in the success and long-term viability of Mall of America,” the owners said.

The $ 1.4 billion loan has been outstanding since December, according to Trepp, a New York-based research firm that tracks the market for commercial mortgage-backed securities, or CMBS. From the December payment, the loan was converted to interest only until maturity, Trepp said.

The Mall of America was closed from mid-March to June due to the pandemic. The property’s retail tenant collections fell to a low of 33% in April and May, according to data from Trepp.

“In the face of these unprecedented economic times, we immediately began working with our lending partners to resolve the cash flow issues created by this loss of revenue,” said Dan Jasper, vice president of communications for Mall of America, in a statement. communicated.

“We are pleased to have been able to resolve the outstanding issues to the satisfaction of all parties involved, including a modification of the loan conditions,” he said.

The Star Tribune first reported on the updated status of the loan.

“This is a trophy and the trophies are more likely to meddle with the pandemic than B [or] C malls, ”Manus Clancy, senior managing director of Trepp, told CNBC.

There are still about 1,000 malls in the United States today, according to commercial real estate services company Green Street Advisors. A large majority of these malls are classified as so-called B, C and D malls, which means they generate less sales per square foot than a mall A. An A ++ mall could earn up to at $ 1,000 in sales per square foot, for example, while a C + mall makes about $ 320.

“If you have Mall A, you see that as a vote of confidence,” Clancy said. “If you have B [or] C, there is no bearing. The lowest rated malls … won’t succeed. “

As restaurants, retailers, and entertainment venues were able to reopen at the Mall of America, traffic has started to rebound – especially around the holidays, said. Triple Five Group. The company, which also operates the American Dream megamall in New Jersey, hopes 2021 will be a better year for business.

Yet Covid cases continue to rise in the United States and the threat of reinstatement of lockdowns looms. The US vaccination effort against Covid, which has the potential to build consumer confidence, is also well below initial estimates.

“While the coming months will continue to present unique challenges, we remain optimistic for our business and look forward to the day when we can once again welcome visitors from around the world,” said Jasper.