Simon Seeks Extension for $295M Loan on California Mall
CMBS loan on The Shops at Mission Viejo goes into special servicing.
Simon Property Group is seeking an extension of a $295M loan backed by The Shops at Mission Viejo, a CMBS deal that came due on Feb. 1 and went into special servicing.
The mall at 555 The Shops Avenue was valued at $543M. According to an SEC filing on Feb. 6 notifying the regulator that the loan had gone into special servicing, the Simon REIT is the 51% owner in the mall. According to an alert from Trepp, short-term forbearance also is a possible resolution of the matter.
The Shops at Mission Viejo is the southernmost mall in Orange County, anchored by Macy’s, Nordstrom and Dick’s Sporting Goods.
Simon Property Group reported a net income of $674M in the fourth quarter, up from $503M YOY. Occupancy in Simon’s portfolio increased to nearly 95% in Q4.
Simon Property Group recently unveiled the experiential mall of the near-future in Los Angeles, an Urban-Retail Village with 380 apartment units, outdoor shops and restaurants that will replace a former Sears complex at Brea Mall.
Urban-Retail Village is a rapidly emerging post-pandemic model for the redevelopment of malls into experiential communities, where people can stroll out of their apartments into a neighborhood filled with outdoor shops, restaurants and, of course, a fitness center so the local foot traffic is brisk.
According to plans the mall REIT submitted to the city late last year—which were approved by the Brea Planning Commission in December—Simon is planning this kind of transformation at the Brea Mall, the Los Angeles Daily News reported.
The plans call for the redevelopment of nearly 16 acres of the 74-acre mall, a vacant 162K wing formerly occupied by a Sears department store and a Sears Auto Center, which is a separate building in a 7.5-acre parking lot.
The vacant Sears outlets, which have been empty for years will be demolished to make way for the Urban-Retail Village, which also will include upgrades to State College Boulevard between Imperial Highway and Brea Mall South.
Brea Mall opened in 1977 anchored by with May Co. and Sears. The Orange County mall featured an ice skating rink in the 1980s that was later converted into a food court. The mall currently is anchored by Nordstrom and generates an estimated $700M in sales, according to the REIT’s latest earnings statement.