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The fate of a suburban shopping mall is up in the air after its owner failed to pay off the mortgage on the asset. A Rubloff Development affiliate owed $28.6M on Woodscreek Commons, a 207k SF shopping center in Algonquin that's 99% leased and generating consistent revenue. It's not a dead mall, but Woodscreek is another example of CMBS volatility dating to the pre-crash market.
Rockford-based Rubloff's loan on the asset was sold in a CMBS offering in 2006, well before the recession, Crain's reports. With the mortgage coming due, Rubloff struggled to keep ahead of the payments. Woodscreek generated $1.1M in net cash flow in the first half, which was enough to cover $854k in debt payments.
Complicating matters is the way the suburban retail market has recovered. While there's healthy demand for grocery-anchored assets like Mariano's and Whole Foods, generic shopping malls like Woodscreek are still struggling. Anchored by a Kohl's, Michael's and HomeGoods, Woodscreek is near another mall with a distressed mortgage: Algonquin Commons was hit with a $110M foreclosure suit in 2012. And 45% of the leases at Woodscreek are expected to expire in the next 21 to 32 months.
Woodscreek is Rubloff's second mortgage default; the firm also missed a $21M payment on Gateway Mall in Machesney, near Rockford. [Crain's]
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