This week’s column takes a look at the prospects for loans coming due on several major shopping malls. Read the entire piece by clicking “read more” below.
U.S. malls are entering a more structurally sound phase, with occupancy, rents and net operating income all trending higher, according to a new report from retail and technology analytics firm Coresight Research.
Those gains are increasingly concentrated among top-tier, well-located properties, Coresight said. These malls are benefiting from limited new construction, sustained retailer demand for prime space and a strong ability to replace vacancies with high-performing tenants.
Malls outside the top tier, meanwhile, face a compounding set of challenges from weaker tenant demand, limited re-tenanting options for luxury and experiential assets and constrained access to capital, Coresight said.
That dynamic often shapes the outcome for loans backing the properties in the commercial mortgage-backed securities arena. There are more than $1.1 billion in mall loans scheduled to mature this quarter, according to Morningstar Credit.
Take Simon Property Group. The owner of premium assets in top markets across the United States completed three refinancings totaling $1.83 billion on The Florida Mall in Orlando, Florida; Fashion Center Mall in Arlington, Virginia; and The Shops at Crystals in Las Vegas.
Another owner of a strong portfolio of properties, Brookfield, landed two refinancings totaling $685 million for three malls, including Tysons Galleria in Northern Virginia, Altamonte Mall in Altamonte Springs, Florida and Willowbrook Mall in Houston.
Still, even the best-capitalized landlords are not immune to refinancing pressure as loan maturities come due. Here are some examples:
Simon mall loan misses maturity
A $180 million CMBS loan backed by Quaker Bridge Mall in Lawrenceville, New Jersey, with loan pieces included in CMBS deals JPMDB 2016-C2 and CSAIL 2016-C6, has moved to special servicing after failing to pay off at its May maturity.
The loan is secured by 357,000 square feet of the Simon-owned shopping center. The 1.1 million-square-foot mall spans two stories and serves as a major regional retail hub.
Simon indicated in April that it would not be paying off the loan on time and had requested that it be transferred to a special servicer, according to the latest servicer notes. The mall owner has previously negotiated to extend the terms of loans backing other centers, Morningstar Credit said in a report.
“It wouldn't surprise us to see the same scenario play out here,” the report said. “Similar mall loans have recently received extensions.”
As of year-end 2025, the occupancy was 72.1%, and net cash flow was $1.36 for every dollar of debt owed.
Wisconsin mall nears another deadline
A $114.1 million CMBS loan on Fox River Mall in Appleton, Wisconsin, included in CMBS deal WFCMS 2011-C4 has once again transferred to special servicing as a maturity deadline approaches.
The Brookfield-owned mall first entered special servicing ahead of its 2021 maturity. Lenders granted a three-year extension through 2024. When the loan came due again, servicers approved a short-term extension, pushing the new deadline to June this year.
Fox River Mall serves central and northern Wisconsin with more than 130 stores, making it the area’s largest retail shopping center.
The loan is being specially serviced again as Brookfield has indicated it would be unable to pay what is owed, according to the latest special servicer notes. Brookfield requested a three-year extension.
Like many regional shopping centers, Fox River Mall faces stagnant income despite stable leasing. Occupancy has remained relatively steady in the mid 80% range. But cash flow has weakened. The property’s 2025 income came in roughly 30% below its original underwriting levels, according to Morningstar Credit.
California mall loan gets downgrade
Credit-rating firms S&P Global Ratings and Morningstar DBRS have downgraded multiple classes of CMBS deal DBWF 2015-LCN tied to a $310 million loan on Lakewood Center in Lakewood, California. Debt on the mall transferred to special servicing in January ahead of its upcoming June maturity.
The owner, Pacific Retail Capital Partners, is working to refinance the loan and has requested an extension to allow for the sale of land parcels to reduce the refinancing risk, according to the most recent servicer notes from April.
The property itself remains relatively well leased, with occupancy above 90% based on recent rent rolls. However, its value has declined sharply. The mall sold in August for roughly half of its original appraised value at loan issuance.
S&P Global and Morningstar cited the drop in valuation, elevated loan-to-value ratios and refinancing uncertainty as key drivers behind the downgrades. At the same time, they noted stable cash flow and ongoing debt paydown are helping to buffer shortcomings.
The 2.1 million-square-foot mall, located about 20 miles from downtown Los Angeles, remains a major retail asset. Pacific Retail has indicated plans to reposition the property, including potential mixed-use redevelopment.
Neither Simon, Brookfield, nor Pacific Retail responded to requests for comment from CoStar News.