The Mall of America (MOA) is now current on its mortgage after falling behind on payments in the spring due to the COVID-19 pandemic.
The Triple Five Group, the Bloomington megamall's owners, modified the terms of its $1.4 billion loan and is no longer delinquent, MOA said in a statement to Bring Me The News on Tuesday.
MOA was closed from mid-March to June and so were the businesses in the mall, which made it hard for many to pay their rent.
"While most businesses struggled with this new reality; the retail, hospitality, travel and tourism, restaurant and attraction segments were especially hard hit. Government-mandated closures and restrictions impacted these industries even more dramatically leaving many of our tenants unable to pay rent," MOA said in the statement.
Triple Five Group missed its first mortgage payment in April and fell delinquent on its loan in May. At that time, MOA said the pandemic stressed its revenues, dropping them by 85%, which caused a "significant interruption to our cashflow." Financial pressures caused by the COVID-19 pandemic also forced the mall to layoff 211 employees in late September.
"Facing these unprecedented economic times, we immediately began to work with our lending partners to address the cash flow issues created by this loss of revenue," MOA said Tuesday. "We are pleased to have been able to resolve the outstanding issues to the satisfaction of all parties involved which included a modification of the loan terms."
In August, MOA entered into an agreement to stay out of foreclosure. And after an initial grace period, the mall continued to be delinquent on its payments for months but now it is current as of December, the Star Tribune reported Tuesday.
"Early in our conversations, lenders pointed out their strong confidence in the long-term success and viability of Mall of America," MOA's statement continued. "They understood that we faced a short-term cash flow issue during a time when many tenants were temporarily unable to pay rent due to the financial impacts of the pandemic."
The mall's loan was converted to interest-only through maturity, the Star Tribune said, citing information from the data firm Trepp.
Customer traffic at malls across the country has been slow to rebound to pre-pandemic levels following the initial government shutdowns. Foot traffic at shopping centers across the U.S. was down 87% in late March to mid-April when compared to the same time in 2019, according to Placer.ai, a foot traffic analytics firm.
Shoppers returned to malls over the summer, but foot traffic levels were still about 30% lower than in 2019, Placer.ai's website shows. And in the final months of 2020 – when retailers often see the most sales – foot traffic at shopping centers was still down more than 30% in Minnesota and 20-40% nationwide in late November and December.
MOA, though, is positive about the future.
"While the coming months will continue to present unique challenges, we remain optimistic for our business and look forward to the day when we can once again welcome back visitors from around the world," MOA said in a statement.