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Mall of America gets modified terms on US$1.4b mortgage


THE Mall of America is current on mortgage payments it had missed during the pandemic, after lenders agreed to ease terms of its US$1.4 billion loan.

The largest shopping centre in the US became delinquent on its debt last year after its owner Triple Five Group began skipping mortgage payments, citing hardships from the ongoing Covid-19 pandemic.

It received a modification from lenders in December that allows it to pay only interest on the debt.

Under the terms of the modification, the 5.6 million square foot (sq ft) mall will continue to meet increased reporting requirements and send net cash to its lenders on a monthly basis, according to its special servicer.

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The shopping centre has already done so for April to November 2020 as part of a forbearance and cash management agreement. The loan matures in 2025.

CWCapital, the mall's special servicer, will monitor rent collection efforts and expenses as part of the deal.

The Mall of America has been working to collect past due and current rents from its tenants, many of which have struggled financially since the pandemic began.

The Mall of America was forced to temporarily close last March because of the pandemic. It reopened in June with limited hours and select attractions.

As of November 2020, the mall's food services were available for takeout and delivery only and its Nickelodeon Universe amusement park was closed.

Retailers and their landlords, hurt by competition from online stores even before Covid-spurred shutdowns, have struggled to make rent and mortgage payments.

The Mall of America collected about 33 per cent of rents from retail tenants in April and May and 50 per cent in July, according to its special servicer.

Other mall owners reported rock-bottom April rent collections, including about 12 per cent for Tanger Factory Outlet Centers, roughly 20 per cent for Brookfield Property Partners and 26 per cent for Macerich.

The Minnesota-based Mall of America is owned by members of the Ghermezian family, whose holdings also include the West Edmonton Mall, a 5.3 million sq ft complex in their Canadian hometown, and American Dream, a three million sq ft mall in New Jersey. BLOOMBERG

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