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Attention Mall REIT Investors: $47.5 Billion Of Loans Are Set To Mature Over The Next 18 Months

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Attention Mall REIT Investors: $47.5 Billion Of Loans Are Set To Mature Over The Next 18 Months

The rise of e-commerce could very well result in the death of the malls.

According to Bloomberg, the looming death of the shopping malls could come sooner, rather than later. The publication, citing data from Bank of America Merrill Lynch, stated that around $47.5 billion worth of loans backed by retail properties are set to mature over the next 18 months.

Investors who are thinking 18 months is sufficient time for a turn-around in shopping trends should recognize that mall operators, such as General Growth Properties Inc (NYSE: GGP) are having issues repaying debt already.

Detroit-based Lakeside Mall and its owner, General Growth Properties, failed to make a payment this month on a $144 million loan. The default by the second largest mall owner in the United States may just serve as a sign of what is in store for the future of shopping.

Related Link: Gap Is Still Hooked To Mall Traffic Headwinds

Bloomberg also cited Green Street Advisors, which estimates several hundred malls across the United States could completely shut down over the next decade. Properties reliant on mall anchors such as Sears Holdings Corp (NASDAQ: SHLD), J C Penney Company Inc (NYSE: JCP) and Macy's, Inc. (NYSE: M) are most at risk.

"The criteria to get financing is getting a little bit more stringent and cutting off the lifelines for some of these malls," DJ Busch, a senior analyst at Green Street, told Bloomberg in an interview. "It takes a lot of hope and a lot of capital to reinvent a mall that's already somewhat uncompetitive in its market."

Posted-In: Bank of America Bank of America Merrill Lynch BloombergREIT Top Stories Media Trading Ideas Real Estate Best of Benzinga

 

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