Simon Property-Led JV Lands $477M Loan on Tampa’s International Plaza Mall
A joint venture between Simon Property Group, Taubman Realty Group and Nuveen has locked in $477 million in debt originated by Goldman Sachs to refinance International Plaza, a sprawling super-regional shopping mall in Tampa, Fla., according to a rating agency analysis of the transaction.
The floating-rate commercial mortgage-backed securities (CMBS) financing includes a fully extended five-year term, and it was used to retire about $439 million in existing debt, while also allowing the sponsorship to recoup $36.1 million in equity and cover closing costs, according to information from Fitch Ratings. A roughly 740,000-square-foot portion of the 1.2 million-square-foot, enclosed mall serves as collateral for the CMBS loan.
International Plaza is anchored by the likes of Nordstrom, Dillard’s and Neiman Marcus, all of which are housed in a combined 495,000 square feet; the anchor retail space does not serve as collateral for this loan. Located at 2223 North Westshore Boulevard, the mall is next to Tampa International Airport and a few miles from downtown Tampa. The proximity to the airport and the neighboring 293-room Renaissance Tampa International Plaza Hotel are key drivers of traffic to the mall, according to Fitch, which cited information provided by the property management team.
The two-story property, which opened in September 2001, includes an outdoor entertainment and lifestyle area called Bay Street in the center. Bay Street is home to Cheesecake Factory and Capital Grille.
The mall was not built as a luxury retail destination, but, over time, as it has become the top mall in the region, International Plaza has attracted tenants such as Gucci and Louis Vuitton, according to Fitch. Other high-profile tenants such as Apple (AAPL) and Tesla have taken space, too.
While Simon hasn’t undertaken any wide-scale renovation projects at the mall, about $17.1 million was invested in the property from 2018 to 2020, and the ownership joint venture is planning to inject more than $20 million in additional funds over the next five years, according to Fitch.
In-line sales at the property in 2019 were robust, averaging nearly $1,300 per square foot, but last year, amid the pandemic, in-line sales weren’t as bright, falling to $1,019 per square foot — $674 without sales from top tenants Apple and Tesla. Prior to the pandemic, in-line sales per square foot climbed every year between 2013 and 2019.
In the 12 months through May 2021, sales came in at more than $1,000 per square foot, or $820 without sales from Apple and Tesla, an improvement on the full-year 2020 sales figures, according to Fitch, which wrote that International Plaza’s sales growth over the years is a product of international tourism and the presence of office developments nearby. About 46 percent of the mall’s shoppers have been tourists, historically, and more than half of those shoppers were international visitors from Canada, the United Kingdom and Brazil.
While rent collections from the mall’s tenants had stabilized as of June at 95 percent, Fitch pointed to the ongoing return to work efforts and an expected increase in travel as two key factors that would help the mall’s sales numbers recover to pre-pandemic levels.
Despite the positive outlook, International Plaza is staring down notable lease rollover from existing tenants over the course of the term of this new CMBS loan. About 63 percent of the leased net rentable area that serves as collateral for the loan is currently set to expire over the full term, with the largest bundle of expirations coming next year — more than a quarter of the roughly 740,000 square feet net rentable area backing this financing. Next year’s rollover is headlined by the 7.6 percent of combined space that would be left vacant by Forever 21 and H&M, as well as the 4 percent that would be left by Zara, Abercrombie & Fitch and Victoria’s Secret.
Simon Property Group gained ownership over International Plaza as part of its year-long saga to acquire an 80 percent ownership interest in Taubman Realty Group, which wrapped at the end of last year. As part of that $3.4 billion deal, Simon acquired all of Taubman Centers.
Mack Burke can be reached at email@example.com.