The owner of the Willow Bend stores is in default after being unable to refinance the outstanding balance of the $ 135.7 million loan guaranteed by the Plano mall.
Fitch Ratings said it was informed that the loan had been transferred to a special department.
Starwood Retail initially got an extension to refinance the $ 135.7 million outstanding balance on the loan that matured Nov. 8, but the proposed changes did not go through as expected last week, Fitch said in a report. .
Starwood Retail said in a statement Friday that it continues to “actively work to expand and restructure our financing at Willow Bend.
“In the meantime, it’s business as usual at the property,” the statement said.
Starwood’s loan was guaranteed by Willow Bend stores and two other malls, Fairlane Town Center in Dearborn, Michigan, and Stony Point Park in Richmond, Virginia.
The malls have seen “a sustained decline in cash flow since” the loan was issued in 2015, Fitch said.
Online store sales per square foot in Willow Bend, excluding mainline department stores, fell in September to $ 358 from $ 382 the year before, Fitch said in a negative watch rating. .
The rating agency said it “will continue to monitor any development of the special service regarding training strategy.” But given the decline in cash flow, Fitch said, downgrades are likely.
In 2014, Starwood Retail bought Plano Mall in Michigan-based Taubman, who was the original developer of the property in 2001. Each owner has invested a lot of time and money in the mall, but customer traffic has remained low in a competitive business environment with multiple shopping choices in the counties of Dallas and Collin.
Construction continues on the latest addition to the mall, a 10-screen, 40,000 square foot Cinépolis luxury cinema. The chain of theaters, which has its US operation based in Dallas, said Friday that the Willow Bend Theater is scheduled to open this summer.
Last month, Starwood reduced the value of its investment in four more shopping centers purchased from Taubman to zero. This move allows him to move away from the properties and hand them over to the lender. Starwood had a 33% stake in the shopping centers backed by a loan of $ 685.6 million. This loan was backed by the Wellington Green Shopping Center in West Palm Beach, Florida; MacArthur Center in Norfolk, Virginia; Northlake Mall in Charlotte, North Carolina; and Mall at Partridge Creek in Clinton Township, Michigan.
Starwood bought the seven properties backing the two Taubman loans in 2014 for $ 1.4 billion. Last month, Simon Property Group announced it would pay $ 3.6 billion for Taubman.