Simon Property Group is reportedly preparing to hand back the Square One Mall in Saugus to its lender. The enclosed regional mall is classified as a Class C property, reflecting weaker tenant quality and softer shopper traffic than higher tier centers, and refinancing it has reportedly become difficult as lenders tighten terms for lower performing retail properties. The move fits the company's stated strategy of concentrating capital in high quality malls and mixed use projects while letting weaker, capital hungry centers go, and it pairs with a recent US$800 million notes issue being used to tidy near term debt. The bear case also gains support, as difficulty refinancing a single US$76 million CMBS loan underlines concerns about rising debt risks and refinancing pressure, something peers like Macerich and Brookfield also face. Simon Property Group is a US based retail REIT with a reported market cap of $77.4b.
Simon Property Group IncHanding back the Square One Mall to its lender amid difficult refinancing of a $76M CMBS loan signals debt/refinancing pressure.
Macerich Company
Brookfield Asset Management Ltd.