Mall of America missed mortgage payments as COVID-19 crisis takes toll

The mall sought relief via tax aid from the Minnesota Legislature earlier this month.
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Mall of America (MOA) has missed recent mortgage payments. 

The megamall issued a statement Thursday following a report from the Financial Times, which cited documents it reviewed that were prepared by Wells Fargo, saying MOA is delinquent on its $1.4 billion mortgage after missing payments for the past two months. 

In a statement, MOA said the COVID-19 pandemic has stressed its revenues, dropping them by 85% while its larger expenses remain fixed. "It is a formula that cannot be sustained and has caused a significant interruption to our cashflow."

"That lost revenue has impacted our ability to stay current on our operating expenses. Unfortunately, Mall of America has not been able to qualify for any of the federal aid programs that are designed to get people back to work and protect businesses," the statement reads. 

"Facing significantly reduced revenues, and the realization that it will take many months to return to pre-COVID operating levels, we have not met our full mortgage payment obligations."

MOA said it has made partial mortgage payments while paying other expenses "simply to keep our building functioning." 

"Our hope has been to work with our lenders in order to resolve this situation in a way that allows our business to continue to move forward, while also meeting the goals of the lenders," the statement continues. 

“The loan is currently due for the April and May payments,” Bloomberg reported, citing a report filed by Wells Fargo, the trustee of the debt and the master servicer for the loan. “Borrower has notified master servicer of Covid-19 related hardships.”

A spokesperson with Wells Fargo confirmed to Bloomberg the mall is in delinquency, but wouldn't say anything more. 

Mall of America has been closed to in-person shoppers since mid-March due to the coronavirus pandemic and Gov. Tim Walz's stay-at-home order. It did start offering curbside service for a few stores earlier this month, and plans to reopen at partial capacity on June 1

Its financial troubles aren't much of a surprise, though. Not only are most businesses suffering due to the pandemic, but MOA sought some relief via tax aid from the Minnesota Legislature this month, but the city of Bloomington opposed it so the effort stalled in the state Capitol.

Meanwhile, CNBC reported in April that Triple Five Group, which owns MOA, is worried some tenants won't be able to pay rent, which would make it difficult to make its mortgage payments. 

This isn't just MOA, though. Many businesses are choosing to skip rent or mortgage payments during this time, with Financial Times, citing information from CMBS data provider Trepp, reporting delinquencies more than tripled in May from the previous month.

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