Debt

Mall Of America’s Mortgage Payments Reportedly Overdue

Mall of America

Minnesota’s Mall of America, one of the nation’s largest shopping centers, missed its third payment on its $1.4 billion mortgage, Bloomberg reported.

That puts its owner, Triple Five Group, more than 60 days delinquent. The Canadian-based company failed to make its $7 million debt payment for June, the news service reported, citing unnamed sources.

Don Ghermezian, a senior executive at the real estate development company, told CNBC in April that without federal assistance, “many malls will be headed into default.”

Triple Five Group and the Mall of America did not respond to Bloomberg’s requests for comment.

The 5.6-million-square-foot complex on nearly 100 acres features more than 520 shops, including Macy’s and Nordstrom and two hotels. In addition, the mall’s center has a 7-acre indoor theme park, Nickelodeon Universe, according to the company’s website. Since it opened in 1992, more than 1 billion people have visited the mall.

The mall closed in March in response to the pandemic. It partially reopened last week with reduced capacity at restaurants and movie theaters.

Last month, the Financial Times (FT) reported Triple Five Group missed its April and May mortgage payments to Wells Fargo.

The company is not alone.

More than one in five loans bundled into U.S. commercial mortgage-backed securities are on “watch lists” kept by mortgage servicing companies, FT reported, up by 80 percent since the pandemic began.

Data from Trepp, a provider of information to the securities and investment management industries, reported 7.3 percent of loans bundled into commercial mortgage-backed securities deals were 30 or more days overdue in mid-May, according to FT.

“Delinquencies will remain elevated until consumers have confidence to go out again,” Gunter Seeger, a portfolio manager at PineBridge Investments, told FT.

While retailers are under pressure, there are signs of life.

In a separate report, PYMNTS noted retail and food services sales in the U.S. rebounded last month compared to April amid the pandemic, according to the U.S. Census Bureau.

The numbers were still below levels seen in May of last year. The agency estimated advance monthly sales for May of $485.5 billion, a nearly 18 percent jump from April of this year, but 6.1 percent under sales from May of 2019.

Retail trade sales increased by an estimated 16.8 percent from April of this year but were still 1.4 percent below 2019’s levels.

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New PYMNTS Report: The CFO’s Guide To Digitizing B2B Payments – August 2020 

The CFO’s Guide To Digitizing B2B Payments, a PYMNTS and Comdata collaboration, examines how companies are updating their AP approaches to protect their cash flows, support their vendors and enable their financial departments to operate remotely.

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