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American Dream Megamall Gets 4-Year Extension On $1.7B Construction Debt

The American Dream megamall in New Jersey

The country’s third-largest mall, the American Dream in East Rutherford, New Jersey, is out of immediate hot water after its lenders agreed to a four-year extension on its nearly $2B debt obligation.

Triple Five Group, the Canadian developers of the 3.5M SF retail and entertainment complex, owe $1.7B in construction loans set to mature this year. But its lenders — a group led by JPMorgan Chase — have agreed to grant a four-year extension on repayments, setting a new maturity date for October 2026, Bloomberg Law first reported.

“We are pleased that our lenders, led by JPMorgan, share in our vision and recognize Triple Five and American Dream’s successful and impactful contribution to the global retail and entertainment landscape,” American Dream President and CEO Don Ghermezian said in a statement.

The $5B shopping and entertainment complex has missed multiple payments on loans from several lenders in the past year, CoStar reported. American Dream missed its payment deadline for an $800M bond payment to U.S. Bank NA in June, after losing $60M in 2021, according to Curbed.

American Dream posted $107.7M in gross profits, according to its most recent Q3 filing — up 30% from last year.

The mall — which took roughly two decades to materialize and features an indoor ski slope, a Dreamworks water park, a Nickelodeon theme park, a Ferris wheel and a full-size hockey rink — started opening in 2019, but it shuttered again quickly as the pandemic arrived in the U.S.

The mall reopened briefly in 2021, only to close again after 2021’s Hurricane Ida caused flooding in the property. 

Triple Five Group has reportedly been seeking a four-year extension on its $1.7B construction debts since earlier this year, hoping for a chance for more time to recover lost revenues. But Triple Five has an additional $1.1B in debts outstanding on municipal bonds and debt in the form of payments in lieu of taxes.

The mall’s other lenders have also faced difficulties in light of American Dream stopping payments. REIT Western Asset Mortgage Capital Corp., a junior lender on the complex's construction financing, said in a recent securities filing that it now risks losing money on its debt position in the mall.

The notice followed an Oct. 25 announcement by a senior mezzanine lender that it had foreclosed on equity interest in the borrower and owner, effectively taking revenue away from junior lenders. Western Asset Mortgage Capital Corp. said it was reducing its investment in the mall from $26.9M to $8.8M in an attempt to recoup its losses.

Triple Five Group has also recently faced separate difficulties, after a former marketing staffer filed suit in September this year against a board member, alleging unwanted sexual advances.