Macerich on Verge of $115M Mall Refi in SoCal
By Nick Trombola August 1, 2024 3:27 pm
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The third-largest owner and operator of shopping centers in the U.S. is on the cusp of refinancing a mall in Southern California’s Inland Empire region.
Santa Monica-based Macerich’s $115 million loan, provided by J.P. Morgan Chase in 2014, is tied to the almost fully leased Mall of Victor Valley in Victorville, Calif., a community about 80 miles northeast of Downtown Los Angeles. Scott Kingsmore, Macerich’s chief financial officer, announced the refinancing effort during the company’s second-quarter earnings call earlier this week.
The loan matures in September and payments have been current throughout its lifespan, according to data sourced from Trepp.
Macerich expects a new 10-year, $85 million loan tied to the property, with a fixed interest rate of around 6 percent, Kingsmore told investors during the call.
“We believe this [transaction] will be very well received by the financing marketplace,” Kingsmore said. “Following that transaction, we will have less than $300 million of debt at our company share that matures for the balance of 2025 and that is across two loans. The financing market for Class A retail real estate remains wide open and is very, very strong.”
Occupancy at the mall is currently at 99 percent, Kingsmore said.
When asked during the call why Macerich opted to refinance the property rather than hand it back to its lenders, Kingsmore argued that the mall was still a “solid asset.”
“It’s kind of the only game in town in the high desert community of Victor Valley,” Kingsmore said. “It’s certainly not one of our top 10 assets, but it’s a great asset. So I don’t think that one was a difficult decision for us to make.”
The Victorville mall refinancing effort comes amid Macerich’s plan to shed $2 billion in debt obligations by the end of this year, which likely means either selling or transferring properties back to its lenders.
In June, for example, the real estate investment trust handed the 527,000-square-foot Santa Monica Place mall back to Wells Fargo after defaulting on a $300 million mortgage tied to the property.
Nick Trombola can be reached at ntrombola@commercialobserver.com.
