A troubled 1.7 million-square-foot enclosed mall in Woodbridge, New Jersey, once under the control of property giant Brookfield, has been sold at a substantial loss.
Credit-rating firm KBRA on Thursday reported a loan issue tied to the Woodbridge Center mall was resolved via sale in February for a liquidation price of $70.4 million.
Bondholders in two commercial mortgage-backed securities deals, each holding a portion of the debt, lost $155.7 million, according to KBRA, which downgraded its ratings. The loan was transferred to special servicing in June 2020 for payment default, and the last debt service payment made was in June 2022, according to CMBS bondholder reports.
Brookfield, which has owned the mall since acquiring it in 2014, consented to the appointment of a receiver on the property in October 2021, bondholder reports said, and stopped making payments on the loan the following June.
The buyer of the asset has not been disclosed, and neither representatives of Brookfield nor loan special servicer Rialto Capital Advisors responded to requests for more information.
Woodbridge Center was appraised at $366 million when Brookfield acquired the mall as part of its acquisition of GGP in 2014 for $15 billion, according to CoStar data. The most recent appraised value of the property as of October was $79 million.
The loan was collateralized by a 1.1 million-square-foot portion of the 1.7 million-square-foot regional mall located about 30 miles southwest of New York City.
The mall is anchored by Macy’s and JCPenney, which own their store buildings, and Boscov’s and Dick’s Sporting Goods, which were part of the loan collateral.
Performance at the mall has been depressed since the loss of a collateral Sears anchor store in April 2020 and a non-collateral Lord & Taylor store in December 2019, according to Morningstar. According to the property's October rent roll, the collateral was 67.5% occupied, compared with the June 2022 occupancy rate of 62.4% and loan issuance rate of 96.8%.
In February, Woodbridge Mayor John McCormac commented on the status of the mall in his state of the Township address.
“Woodbridge Center, like major malls across America, has struggled because of the internet and the ease of buying directly online,” McCormac said. “It has done an admirable job of diversifying outside of basic retail by attracting new tenants, but it has just not been enough.”
McCormac added that the township made it clear to the mall’s brokers “that we would not accept any housing or warehouse components, no matter who purchases the property. … We are quite thrilled to learn the buyer has every intention of keeping Woodbridge Center as a shopping, dining and entertainment destination, with changes.”