(To read more on the debt and equity markets, click here.)

ARLINGTON, VA-Goldman Sachs Mortgage Co. is providing the Mills Corp. with up to $2.23 billion in financing–most of which will be used to pay off portions of the retail REIT’s debt. About $385 million will go toward “working capital requirements and general corporate purposes,” according to a company statement.

The company has been exploring a sale and is under investigation by the SEC for accounting flaws. Mills, the owner of 42 shopping centers in North America and Europe, is restating its financials from 2000 through last year after its third-quarter NOI and FFO dropped due to the failure to collect rents, charges on projects under construction and other factors.

Mills’ management says it will continue to explore strategic alternatives for the company. So far Vornado Realty Trust, the Westfield Group and other large mall owners have expressed interest in potentially making an offer. For previous coverage, click here.

A Bank of America Equity Research report on the Goldman deal speculates that Mills management and its board may no longer want to sell the company believe that this will allow the firm to recover. Or “the company is trying to gain additional flexibility and liquidity so as not to portray to potential buyers the desperation to sell and thereby potentially garner a higher bid.”

Last month JP Morgan provided the company with a $625-million mortgage on Sawgrass Mills, a center in Sunrise, FL, to replace a $268-million mortgage and $74 million in mezzanine financing. Executives expect to generate about $246 million in proceeds from the deal.

Mills’ management also plans to refinance its Madrid (Spain) Xanadu and Vaughan (Ontario) Mills centers. The refinancing and access to its credit line will allow it to pursue its current developments, says Laurence Siegel, the company’s chairman and chief executive officer. Among the major projects it has in the pipeline are Meadowlands Xanadu in East Rutherford, NJ and 108 N. State St. in Chicago.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

 

GlobeSt Net Lease Spring 2024Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.