After falling months behind on its mortgage, Mall of America’s owner is striking a deal with its lenders to avoid foreclosure.
Triple Five Group, which also operates the American Dream retail and entertainment center in New Jersey, has entered a cash management forbearance agreement with special servicer CWCapital Asset Management, which handles commercial debt payments on behalf of several lenders.
According to the Minnesota Star Tribune, which cited a Tuesday report by Trepp, payments on Mall of America’s $1.4 billion mortgage were made through April but have been delinquent for the past three months. The data firm reportedly added that the megamall’s collateral value has declined from $2.3 billion in 2014 to $1.9 billion this year.
Mall of America — located in Bloomington, Minn., a suburb of the Twin Cities — is the largest shopping center in the United States. Due to government-mandated restrictions on nonessential businesses, it was forced to close in mid-March and remain shuttered for weeks.
Even though it has reopened to the public, the mall has faced challenges stemming from some of its 500 retail tenants’ inability to pay rent or decision to skip out on lease obligations to preserve liquidity within their businesses. Over the past few months, several major nationwide chains including J.Crew, JCPenney and Brooks Brothers have filed for bankruptcy protection. Others like Gap, H&M and Nordstrom have sought rent relief or warned property owners that they would pay only a certain portion of their rent costs for the year.
The Trepp data, as reported by the Star Tribune, showed that tenant rent collections at Mall of America climbed from 33% in April to 50% in July as retailers began to reopen their doors at the shopping center.
Triple Five is also dealing with its American Dream project in East Rutherford, N.J., which had been plagued with delays over the course of nearly two decades. (Triple Five, however, only become recently became the owners of the mall.) It was slated for a grand opening in the fall, but the debut date was pushed back even further as the COVID-19 outbreak touched down in the United States’ east coast. In mid-April, the complex turned its facilities into a coronavirus testing site in partnership with Hackensack Meridian Health and Agile Urgent Care. The appointment-only drive-through testing center was intended mostly for police officers, first responders and health-care professionals, but community members were able to schedule a telemedicine visit and be seen in person if they met certain criteria.