Shopping mall debt includes some prominent local spots like Ala Moana
Shopping centers nationwide are still grappling with the impacts of COVID-19 and one of their challenges is large loan balances. Some of the debt on these balance sheets is a local story.
Using loan data researched by Bloomberg, Pacific Business News, and its parent company, American City Business Journals examined heavily indebted malls in Hawaii and across the country.
In New York City alone, for example, there are 119 loans officially classified as distressed, totaling over $ 4.5 billion. In Las Vegas, there are 30 distressed loans, totaling nearly $ 1 billion.
No city is immune as pandemic-era foreclosure policies accelerated trends towards online shopping – and left tenant stores unable to pay rent. The data suggests that not all malls will survive.
Some Hawaiian malls are among those that make large loans, but Honolulu-based real estate broker and appraiser Stephany Sofos says they generally have certain advantages that their counterparts in the continental United States do not.
Hawaii’s regional malls have essentially staked out territory in populated areas and resources, like land, are limited for new developments to challenge them.
She expects business to increase after COVID, but believes malls here may actually have a tougher year 2022 on the tenant side as small retailers struggle with their own losses and challenges to secure financing. .
Among Hawai’i malls, Ala Moana Center carries the largest loan – $ 500 million, specifically for its expansion to ‘Ewa.
Pearlridge holds $ 225 million. Smaller malls are also struggling, like the Hawaii Kai Mall, currently in receivership run by CBRE following a lawsuit in 2020 between the landowner and the mall owner. She owes just under $ 27 million on a $ 33 million loan.