$80M CMBS Loan on Maine Mall Sent to Special Servicing


An $80 million loan backed by Bangor Mall in Bangor, Maine has been sent to special servicing, according to an alert from Fitch Ratings.

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The 10-year term loan was transferred to special servicer LNR Partners, Inc. on Tuesday due to imminent maturity default. It comprises just over 14 percent of the remaining collateral in the Morgan Stanley -sponsored MSC 2007-IQ16 commercial mortgage-backed securities transaction.

The loan is secured by Bangor Mall— located at 663 Stillwater Avenue in Bangor—a sprawling 658,827-square-foot retail center that was built in 1979 and is situated on 60-acres of land.

In January, the mall’s largest anchor tenant, Macy’s, which occupied 118,825 square feet, or nearly 22 percent of the property’s retail space, announced it was closing its doors. By June, the store had shuttered, according to watchlist commentary provided by Trepp.

Subsequently, Kroll Bond Rating Agency downgraded the mall’s performance outlook amid concerns that its other anchor tenants—Sears, which leases 105,817 square feet on a lease that will expire in October 2018, and J.C. Penney, which occupies 95,082 square feet on a lease set to expire in February 2019—were also struggling, according to information provided by Trepp.

Earlier this month, as the loan neared its October 1, 2017 maturation date, the borrower intended to reach out to potential lenders for refinance, but to no avail, according to Trepp. The loan, which was originated in 2007 with a rate of 6.1 percent, has been on the servicer watchlist since February 2016.

Although it was originated nearly a decade ago, the loan still remains at its origination balance of $80 million, according to Trepp. This marks the loans first trip to special servicing.

Bangor Mall, LLC, the entity that owns and operates the mall, did not immediately return a request for comment.