I would not ordinarily mention this for a variety of reasons, but I've been poking at "dead malls" and stumbled across (I don't recall and don't care to reconstruct the path) The Source's delinquent balloon mortgage. When I was looking at General Growth's BK after looking up who did the Natick mall condos, I kept asking myself why hadn't SPG had financing troubles. Turns out SPG _did_ have financing troubles, and I'm tempted to characterize what they did with Crossroads in Omaha as jingle mail (why this is okay for a REIT mall owner and someone stigmatized for human home owners persists in confusing me -- it's all contracts), but never mind that now. As near as I can tell, SPG owns 25% of The Source, and The Source owes $124 million that it is not paying. As I was trying to find out current status on that loan, I landed in the July 2011 online issue of Shopping Center Business (a trade publication) and found myself looking at a pretty little table of the top 10 Delinquent Retail Loans -- of which The Source is #9.
Want to know what #1 is? $305 million -- yes, dear readers, almost a third of a billion dollars -- on Riverchase Galleria, a mall in Hoover, AL, near Birmingham. The hotel at the mall (I'm sure by this point you were expecting residential in some form, right?) is already in foreclosure.
People seem very unoptimistic about the prospects for payment on the Riverchase loan; it is expected to wipe out many tranches on the CMBS it is part of.
ETA: Looks like jingle mail on Montclair Plaza as well, by General Growth. So GGP went into BK and came out, but Riverchase Galleria and Montclair Plaza were not included in the BK, and they are the top 2 delinquent retail loans at 305 and 190 million -- a sweet even half billion between the two. Wow. Is this normal? Should I not be shocked by this? Montclair is near San Bernadino, so Inland Empire woes again.