The owner of the Providence Place mall has delayed the mortgage on the property and is trying to refinance its obligations on the property, according to the credit rating agency Fitch.
The mall’s mortgage was put into special service on April 27 “due to an impending currency default,” Fitch Ratings said in downgrading the credit rating of the securities that contained the mortgage.
A special servicer manages defaulted loans that are in default.
Publicly traded Brookfield “requested a possible extension of the maturity to guarantee refinancing,” wrote Fitch. “The special representative is reviewing the request at this time.”
Providence Place, like several other malls in the country, was hit hard by the COVID-19 pandemic.
According to Fitch, Providence Place was 86.2% occupied in December. The stores in the mall, excluding the Apple Store, reported sales of $ 417 per square meter in 2020, compared to $ 647 per square meter in 2019.
Fitch downgraded a series of bonds after the mortgages of three regional malls, including Providence Place, were put into special service. The three malls represent 52% of the bond lending pool.
The Providence Place mall and garage were built with state bond financing and opened in 1999. The collection of state sales tax at the 1.3 million square foot mall repaid the bonds. The last payment of the title was made last year.
The mall also has a tax treaty with the city of Providence that substantially reduces the payment of property taxes. The treaty is due to expire in 2028.
At the same time that it downgraded securities containing mall mortgages, Fitch also last week affirmed the credit rating of “pass-through certificates” guaranteed by a “payment instead of a tax lien” on the property of the mall. “
“The operating performance of the Providence Place Mall asset has recently declined due to the effects of the coronavirus pandemic and the government-mandated store closures during 2020,” Fitch wrote in a separate rating note.
Brookfield representatives could not be reached immediately for comment on the mortgage on Friday.
Former Providence Mayor Joseph Paolino, who worked in the business to build the mall while under the administration of former Mayor Vincent “Buddy” Cianci Jr., said on Friday that if the mall changes hands again, he prefers to see a sale to the local Owners.
“The biggest problem the mall had is that it doesn’t belong to people who know Providence,” said Paolino. “When something is owned by a great [real estate investment trusts], they try to extract money for shareholders. They don’t have the same passion for the community. “
On Twitter: @PatrickAnderso_
This article was originally published in The Providence Journal: Providence Place mall owner seeks mortgage relief after COVID fight