Westfield appears to have struck a deal to sell its beleaguered, 1.6M SF mall in Wheaton, Maryland.

The potential deal comes as Westfield Wheaton, owned by Unibail-Rodamco-Westfield, is now valued at $136M, according to a new appraisal posted this month by CMBS tracking firm Morningstar Credit. That’s down 66% from its $402M appraisal when the mall was refinanced and its debt was securitized a decade ago.

The 1960s-era mall has been in special servicing since March, when its $235M mortgage matured and URW failed to pay it off. The loan was taken out in February 2015 to refinance the property. That was before Unibail-Rodamco purchased Westfield in 2018.

The Paris-based mall giant owned the property in a joint venture until February, when it bought out its partner's 47% interest, according to its first-half financial disclosure. It now has 100% control of the asset and is in talks with the special servicer about the path forward for the mall, which is anchored by Target, JCPenney, Costco and Macy’s and was 97% leased as of March.

A “qualified buyer” has extended an offer to buy the loan and assume the debt, according to commentary from special servicer Greystone published this month in Morningstar's database. Greystone and URW are in negotiations with the buyer, whose identity couldn't be learned as of press time.

“Discussions are ongoing with lenders on different options including an eventual sale, refinancing or foreclosure,” URW said in its first-half report published July 31.

URW didn't immediately respond to a request for comment.

Westfield Wheaton isn’t the only URW mall taking a major haircut with an appraisal as it goes through a loan workout.

Less than 10 miles away, sits URW's Westfield Montgomery mall, whose valuation was cut in half in October, dipping from a $680M valuation a decade before to $353M.

At the time, the 1968-era mall received a two-year extension on its maturing CMBS loan. It has until August 2026 to pay off the $331M mortgage.

The 836K SF portion of the mall backed by the CMBS loan — which does not include Macy’s, Macy’s Home or Nordstrom — was 91% leased as of last year.

CLARIFICATION, AUG. 21, 10:20 A.M. ET: This story has been updated to clarify the footprint at Westfield Montgomery that’s backed by the CMBS loan.