Loss Of Anchor Tenant Inches South Side Shopping Center Closer To Loan Default
Consider this story one of the downsides of grocery-anchored retail real estate. The owners of a South Side shopping center that lost its grocery anchor are in danger of defaulting on the mortgage if they cannot refinance it. And their chances of refinancing are nigh-impossible unless they find a new anchor tenant ASAP, Crain's Chicago Business reports.
Ulta Foods is leaving Westport Commons in the Ashburn neighborhood next month. The grocer occupied half of the 177K SF shopping center. Although ownership will collect rent through the end of Ulta Foods' lease in July 2018, the property's $17M loan was due on March 1.
Without a replacement tenant or tenants, that loan, which is part of a CMBS offering, will go into default.
There are $1.93B in CMBS loans maturing in the Chicago market this year, a reminder of the loose lending that led to the 2008 market crash. CMBS delinquency rates were near a two-year high last month.