Please do not leave this page until complete. This can take a few moments.
The value of the Greendale Mall property in Worcester has plummeted by 77 percent in the last 10 years to $14.7 million, setting up a possible foreclosure sale.
The Greendale Mall has been in financial trouble, with only an 80-percent occupancy rate, leading to the mall not bringing enough profits in to cover the $45-million commercial mortgage-backed securities (CMBS) loan on the property, according to Trepp, a data provider for those in the commercial real estate. That resulted in the loan being foreclosed on and sent out to special servicer C-III Asset Management in October of last year.
That company recently revalued the Greendale Mall property, which is the collateral behind the loan, down to $14.7 million as part of the process to give the involved parties and any future buyer an idea of how much the property is worth. The property was valued at $65 million in 2006, according to Trepp.
Simon Property Group is the commercial real estate company that owns and operates the Greendale Mall along with the Auburn Mall and Solomon Pond Mall in Marlborough. The company did not respond to requests for comments.
This revaluation devalues the $45-million loan down to $12.31 million were C-III Asset Management to sell the loan. For now the asset company will work with Simon to try and get more tenants into the mall and bring the value up, according to Trepp, but a foreclosure could also be on the horizon for the mall property.
The mall's debt-service ratio coverage, which refers to the amount of cash flow the property generates compared to the amount owed on the loan, was at 0.96 through 2014, but fell to 0.76 during the first six months of 2015. That is with major tenants with leases soon to expire, such as Best Buy, whose lease expires in 2017. TJ Maxx is the anchor of the mall, making up 18 percent of the gross leasable area, and has a lease that runs through 2020.
In an interview with the Worcester Business Journal in 2015 for the story 'Malls lean on innovation for success', Rob Robledo, vice president of retail tenant services at CBRE New England raised concerns about the Greendale Mall based on its relatively small size (309,000 square feet), and lack of innovative features to draw people in such as a premiere restaurant. During that interview, Robledo speculated the mall could be redeveloped into a mixed-use property.
Stay connected! Every business day, WBJ Daily Report will be delivered to your inbox by noon. It provides a daily update of the area’s most important business news.
Sign upWorcester Business Journal provides the top coverage of news, trends, data, politics and personalities of the Central Mass business community. Get the news and information you need from the award-winning writers at WBJ. Don’t miss out - subscribe today.
SubscribeWorcester Business Journal presents a special commemorative edition celebrating the 300th anniversary of the city of Worcester. This landmark publication covers the city and region’s rich history of growth and innovation.
See Digital EditionStay connected! Every business day, WBJ Daily Report will be delivered to your inbox by noon. It provides a daily update of the area’s most important business news.
Worcester Business Journal provides the top coverage of news, trends, data, politics and personalities of the Central Mass business community. Get the news and information you need from the award-winning writers at WBJ. Don’t miss out - subscribe today.
Worcester Business Journal presents a special commemorative edition celebrating the 300th anniversary of the city of Worcester. This landmark publication covers the city and region’s rich history of growth and innovation.
In order to use this feature, we need some information from you. You can also login or register for a free account.
By clicking submit you are agreeing to our cookie usage and Privacy Policy
Already have an account? Login
Already have an account? Login
Want to create an account? Register
In order to use this feature, we need some information from you. You can also login or register for a free account.
By clicking submit you are agreeing to our cookie usage and Privacy Policy
Already have an account? Login
Already have an account? Login
Want to create an account? Register
This website uses cookies to ensure you get the best experience on our website. Our privacy policy
To ensure the best experience on our website, articles cannot be read without allowing cookies. Please allow cookies to continue reading. Our privacy policy
0 Comments