Tuesday, April 23, 2024
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The nation's leading real estate data firm is reporting that the loan supporting Providence Place Mall is in jeopardy.
According to Trepp, “A Rhode Island shopping mall loan has been sent into special administration. The $254.9 million #CMBS loan defaulted and was transferred due to approaching maturity. The collateral includes 980,711 square feet of retail space at the mall in Providence, Rhode Island.”
CMBS loans are “commercial mortgage-backed securities.”
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In an email to GoLocal, Trepp confirmed that the mall in question is Providence Place Mall.
Functionally, this means that Providence Place's loan is approaching maturity, but the borrower is unable to repay the outstanding balance in full at that time. As a result, the loan is transferred from the Primary Service Provider to a Special Service Provider, who then works with the borrower to resolve the impending default, including modifying the loan terms or finding a new lender.
According to the mall's owners, the property will feature 140 shopping and retail stores, 26 dining options and four full-service restaurants in the heart of downtown Providence, connected by a “skybridge” to the Omni Hotel and RI Convention Center.
Trepp, the firm warning of lending difficulties, is “a leading provider of information, analytics and services to the structured finance, CRE and banking markets.”
Providence Place is owned by Brookfield Properties, which manages and develops real estate investments on behalf of Brookfield Asset Management, the world's largest alternative asset manager.
Brookfield had not responded to questions at the time of publication.
In the short term, operations at Providence Place Mall should not be affected.
More uncertainty for shopping malls
Currently, Providence Place has only two anchor stores: Macy's and Pennsylvania discount store Boscobus.
Then in February, Macy's announced major corporate changes and large-scale store closures over the next three years.
Macy's closed
According to a Macy's announcement earlier this year, the company will “close approximately 150 less productive stores, including approximately 50 by the end of the fiscal year, to prioritize investments in approximately 350 potential stores and the continued expansion of smaller store options.”
The company hasn't disclosed which stores it plans to close over the next three years. In addition to its anchor store at Providence Place, Macy's has a second store at Warwick Mall in Rhode Island.
Macy's announcement raises the possibility that Providence Place may be targeted. If the store survives the closures and the company is successful in its strategic upscale shift, it could become a destination and help revive the mall.
This story was first published on April 22, 2024 at 2:01pm.
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