Santa Monica Place Mall’s Value Plummets 59%

This isn’t the holiday discount Macerich had in mind. 

The 523,139-square-foot Santa Monica Place shopping mall in Santa Monica, Calif., saw a big drop in value at its latest appraisal, according to new information from Trepp, citing November remittance data. The asset’s value dropped 59 percent in just seven years to $255 million, below the $300 million loan balance.

The shopping mall at 395 Santa Monica Place was built in 1980, renovated in 2010, and appraised at $622 million when the two-year loan from Wells Fargo was securitized in 2017. 

Santa Monica-based Macerich secured a 36-month extension to push the maturity to December 2022, at which point the estimated value of the mall had already started to drop to $390 million, followed by more loan extensions.

The loan was sent to special servicing in the spring of this year in anticipation of a default at maturity, which is now December 2024. The shopping center’s occupancy has been below 90 percent since 2020, and dropped to 65 percent this year, Trepp reported.

The real estate investment trust is working to unload assets in the region to meet its debts, but Macerich said it will take another year or two to sell Santa Monica Place. However, earlier this month, Macerich announced it sold The Oaks shopping mall in Thousand Oaks for $157 million. 

Gregory Cornfield can be reached at gcornfield@commercialobserver.com.