A $100 million loan on Meadows Mall was not paid off when it came due a month ago and has moved to so-called special servicing, analysts said.
The loan on the Las Vegas shopping mall matured on July 1, and a transfer to special servicing means the debt needs to be worked out in some manner, said David Putro, associate managing director at Morningstar Credit Analytics, in an email to the Las Vegas Review-Journal.
He said the loan was not paid off and that this is the second time the debt has moved to special servicing. As he described it, the loan previously came due in July 2023 and wasn’t paid off at that time, either, but the borrower negotiated a three-year extension.
Cash flow has since dropped, and given the $100.4 million balance on the loan, “refinancing doesn’t seem to be an option,” Putro said.
He said the options “really become” either another extension or the lender “pursues foreclosure.”
“We have seen a lot of mall loans get extensions and the borrower is looking for another one here,” he said.
Meadows Mall operator GGP and its parent company Brookfield Property Partners did not respond to requests for comment.
Mrs. Fields and Cinnabon
Built in the 1970s, Meadows is off Valley View Boulevard at Interstate 11. It has some vacancies and the kinds of businesses seen at any American mall, including Zales Jewelers, Mrs. Fields, Cinnabon, Foot Locker, Lids, JCPenney, and Macy’s.
But most of the retail space in Meadows is occupied, with a lineup that also includes deep-discounter Nellis Auction, Latino-focused department store Curacao, and a bowling and arcade place called Round1.
Foot traffic has by no means vanished. As seen on a recent Thursday afternoon, the mall wasn’t packed with shoppers, but a fair number of people were strolling around.
Nonetheless, Meadows has only faced more competition in Southern Nevada since it was built, not only from newly built or renovated retail hubs in the ever-expanding Las Vegas Valley but also from e-commerce sites that vacuum up consumer spending, as seen by the blue Amazon vans delivering packages all over town.
Morningstar recently published a news alert that the loan on Meadows had moved to special servicing ahead of its maturity date.
It said in the report that the loan is backed by 308,000 square feet of retail in a mall that, overall, spans 945,000 square feet.
‘Long-running property distress’
Trepp, a research firm that tracks commercial real estate mortgages, confirmed to the Review-Journal that the loan secured by Meadows Mall was transferred to special servicing “after the borrower indicated it would be unable to repay the debt at maturity.”
According to Trepp, the borrower has requested discussions on a potential loan modification, and the loan servicer is “awaiting a formal proposal while also preparing to engage counsel for potential enforcement actions if negotiations do not advance.”
Andy Boettcher, head of research at Trepp, said in a statement that Meadows Mall “demonstrates how loan maturities can become a catalyst for resolving long-running property distress.”
He said refinancing options were limited without a significant capital contribution from the borrower, and he agreed with the notion that when a loan goes to special servicing, this is not a good direction for a borrower.
This kind of transfer indicates the loan “needs some form of workout,” he said.
Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342.
