Megamalls Like Mall Of America And American Dream Face Mega Problems 

Mall of America

Megamalls are having mega problems. The two largest U.S. malls — Minnesota’s Mall of America and New Jersey’s American Dream mall — are struggling, with the company that owns both recently skipping a third straight payment on the Minnesota property.

Located in Bloomington, Minn., the Mall of America features not only 500 stores, but also some 28 amusement-park rides, an aquarium and more. But it was a victim of the North Star State’s mid-March shutdown of non-essential retail and continues to struggle even after reopening on June 10. The mall had already long suffered from decreased foot traffic even before the pandemic.

The recent missed payments were reported by the Minneapolis/St. Paul Business Journal, citing notes from mortgage “special servicer” CWCapital. In commercial real estate, special servicers aim to help resolve troubled commercial loans. According to the Million Acres real estate news source, servicers work with borrowers who have defaulted on a term or clause of a loan to determine alternative arrangements to foreclosure.

Triple Five Group, which owns both megamalls, is supposed to make $7 million monthly payments on the Minnesota property after refinancing the site’s $1.4 billion mortgage in 2014. But the Canadian company now owes nearly $28 million in missed payments and interest, according to the Journal. Requests for comment from the mall went unanswered.

Could the property default? That’s possible, but seems unlikely at this point. “Pre-negotiation agreement has been executed, and the borrower submitted a proposal to Special Servicer, which is currently under review,” CWCapital wrote in notes the Minneapolis/St. Paul Business Journal quoted.

One of Triple Five Group’s biggest creditors, Chicago-based investment manager Nuveen, told The Wall Street Journal this week that “we do not anticipate writing down the investment and believe the bond structure supports investor value.”

American Dream has its own problems. Under development for more than decade under various iterations, the mall finally opened partly just before the pandemic hit and forced it to close. It has yet to reopen even though New Jersey state officials have cleared it to reopen.

Located in New Jersey’s Meadowlands, the mall’s stores include Saks Fifth Avenue, Tiffany & Co., Dolce & Gabbana, Zara, H&M and Uniqlo. More stores were expected to open, but only a few did. American Dream also lost two anchor tenants — Lord & Taylor and Barneys New York — prior to the pandemic. According to, other tenants considering bailing out include Forever 21, Victoria’s Secret, and The Children’s Place, which are all struggling amid the pandemic.

Beyond stores, the site includes a Nickelodeon-branded indoor theme park, an ice skating rink, a golf course and an indoor ski slope. It also hosts an observation wheel nearly as tall as the Statue of Liberty, plus a 400-seat food hall and some 18 full-service restaurants.

The project has at least $2.8 billion in debt, much of it borrowed in 2017. Collateral for the loan include some of Triple Five Group’s equity interest in the Mall of America and another Canadian megamall.

Triple Five Group is owned by Canada’s Ghermezian family. Publicly, the group has said it will come out of the pandemic whole. For example, it has made adjustments to the pandemic like switching the New Jersey mall from 55 percent entertainment and 45 percent retail to 70 percent entertainment and 30 percent retail, according to CNBC.

“We are going to come out of this super strong … really strong on the entertainment side,” Don Ghermezian told CNBC in April. “I think when [the pandemic] is over, people will be so stir crazy. Initially, there will be some trepidation … but I think we are going to have so many people.”