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Macerich has defaulted on $399M in mall loans across two properties, the company announced in its third-quarter earnings call.
On Oct. 6, it defaulted on a $74M loan on the 691K SF Fashion Outlets of Niagara Falls in New York. On Nov. 2, it defaulted on a $325M loan on the 974K SF Fresno Fashion Fair mall in California. Macerich had previously announced a $76M default on Twenty Ninth Street, an open-air lifestyle center in Boulder, Colorado.
Macerich executives did not offer additional details on the defaults.
“I can't really talk too much about these mortgages that are in default,” Macerich CEO Jackson Hsieh said on the call. “Lenders are listening or whatever, it's not very fair. So let's just say we are in default. We're still having conversations, and we'll let you know when we got more to say, but that's what it is.”
Macerich is in the midst of a multiquarter plan to rebalance its portfolio and improve its balance sheet by offloading a number of underperforming properties, with a goal of selling or giving back $300M to $400M in assets and land.
The company is on track to achieve that objective this year and has sold about $290M worth of dispositions this year to date, Macerich Chief Financial Officer Daniel Swanstrom said on the call.
Macerich reported a $16.7M loss in the quarter, though that was an improvement from the same period last year, when it reported an approximately $90M loss, according to filings with the Securities and Exchange Commission.
The Niagara outlet mall is on the disposition list. Its loan has been modified twice already, including a three-year extension when it originally matured in 2020 and another after missing its 2023 maturity date, CoStar News reported. Its occupancy has dropped as low as 60% in recent years.
The Fresno mall is not on the list of properties for sale. There, Macerich is in the middle of large-scale renovations to public spaces and is adding new tenants, including a $22M Dick's House of Sport, which is expected to open by mid-2028. The mall's special servicer is negotiating terms that would temporarily hold off enforcement of the loan default.
Macerich is also still acquiring properties. On its earnings call, Hsieh teased an off-market mall purchase that is under contract now and should close by the end of the year.
Malls broadly have been on a rebound. Values were up 13% over the past year, more than double the increase in all CRE prices, The Wall Street Journal reported in September.
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