Colorado Mills, one of the largest shopping centers in the Denver metro, was recently reappraised at $135M — a 37% decline from its 2014 valuation of $215M.
Despite the drop, the mall's value still exceeds its outstanding loan balance, according to Morningstar Credit.
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The mall’s $117.7M loan was transferred to special servicing ahead of its November 2024 maturity date, with the servicer pursuing both a loan modification and potential foreclosure, Morningstar said. The debt is tied to two Wells Fargo-led CMBS transactions from 2014.
The Simon Property Group-owned mall in Lakewood, Colorado, generates relatively strong revenue, reporting 2023 net cash flow exceeding original issuance levels, and none of its largest tenants have near-term lease expirations, according to Morningstar.
Regional malls across the country face refinancing challenges, with large national players like Simon and Brookfield Property Partners relinquishing properties or failing to meet upgrade commitments.
Nearby Park Meadows mall in Lone Tree recently refinanced its own loan just days before a potential default, securing a $700M loan with a five-year term. Its owner, Brookfield, had been paying about $1.6M per month on its prior loan with a 3.18% interest rate.
Colorado Mills, which spans more than 1.4M SF, is the fourth-largest shopping center in the Denver area, housing a mix of outlet and traditional retailers. The mall was appraised at $215M in 2014, but like many retail properties, it has faced shifting market dynamics over the past decade.
The number of U.S. malls fell from about 2,500 in the 1980s to 700 in 2023, Bisnow previously reported. Real estate analytical firm Green Street estimates that 15 to 20 malls will close annually — a pace that has held steady since 2018.
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