A European real estate company that owns the Westfield Wheaton mall outside Washington, D.C., said it defaulted on its roughly $234.6 million real estate loan and could sell the property housing more than 115 shops and restaurants.
Paris-based Unibail-Rodamco-Westfield, owner and operator of Westfield Wheaton at 11160 Veirs Mill Road in Wheaton, Maryland, shared in a March 21 report that it had not repaid the secured debt on the property that matured on March 1.
The borrower is discussing options with a special servicer brought in to resolve and manage the CMBS, or commercial-mortgage backed securities, loan, according to Trimont Real Estate Advisors, the Atlanta-based firm acting as the loan's primary servicer, CoStar data shows.
“Westfield Wheaton is one of the Group’s few remaining regional malls, the debt has matured, and we are engaged in discussions with the lender as we explore all options for this asset,” a Unibail-Rodamco-Westfield, or URW, spokesperson told CoStar News in an email.
Retailers at the more than 1 million-square-foot mall that was built in 1960 and renovated in 2016 include Costco, Macy’s, Target and Dick’s Sporting Goods, according to CoStar data and the property's website.
The mall has no vacancy, according to CoStar data, in a market where retail property occupancy has remained strong. “The Washington region benefits from one of the highest median incomes in the country, which has supported a resilient consumer base and a strong retail market,” according to a CoStar Market Analytics report.
The Wheaton retail market has a vacancy rate of 3.7% as of the second quarter, which compares to the five-year average of 3.2% and the 10-year average of 2.9%, another CoStar report notes.
“This mortgage debt has no impact on the rest of the Group’s debt,” URW said in the March report. “Discussions are ongoing with lenders on different options including an eventual sale, foreclosure or refinancing."
URW acquired the stake of O'Connor Capital Partners, its joint venture partner in Westfield Wheaton, on Feb. 25, in a deal that increase URW's interest in the mall to 100%, according to the March report.
The group also owns and operates the Westfield Montgomery mall in Maryland, as well as several in California, according to its website.