Macy's Closures

On the 4th day of every year, the executives at Macy's have a little ritual that involves a little slap and tickle in the board room followed by a ceremonial closure of stores sure to crush already underperforming malls and dash the hopes and dreams of adjacent in-line retailers. This year was no exception as they announced the closure of 5 Macy's and 4 Bloomingdales, all of which will have going out of business sales for 10 weeks before shuttering their doors forever. The List is below.

Macy's:
Parmatown Mall (aka Parmatown Shopping Center) in GMACC 2004-C2 is already in the hands of a receiver, and in late 2011 the receiver identified "critical life safety capital improvements" that were needed immediately. A March 2011 appraisal pegged the value at $29.7mm, substantially below the $62.4mm in outstanding senior mortgage.

Simon - West Ridge Mall is in BACM 2004-4 and represents 11.15% of the deal. The loan has been on and off the watchlist for low DSCR in 2011 and the most recently reported DSCR was 3Q 2011 @ 1.17x with 85% occupancy. Unfortunately Macy's is the premier anchor at the mall in terms of its location in relation to in-line retailers who will get crushed in the near-term; fortunately, Macy's is in the premier anchor at the mall and hopefully Simon can repopulate the dark space relatively quickly. The mall does have other problems - namely the other anchors, which are Sears (ugh), Burlington Coat Factory (never been in one, but what do they sell when it's not winter?), and JC Penney.
Although Hickory Hollow is not in a CMBS deal, there is an unanchored shopping center adjacent to the mall that is in BSCMS 2002-PBW1 that represents 0.24% of the deal. That property is not in default, but it's struggling.

Bloomingdale's:
Mall of America is the big one here, with Bloomingdale's accounting for 7.90% of the sf (expires 8/2012). The Mall also has a Macy's (9.99%). Other than this tenant, the mall has performed well with 3Q 2011 DSCR at 1.71x and occupancy at 91%. The loan is in three CMBS deals: CD 2007-CD4 (4.85%), GECMC 2007-C1 (3.11%(), and COMM 2006-C8 (10.82%).

White Flint does not have any direct exposure, but the Lord and Taylor pad within this mall is in the Lord & Taylor Portfolio in MLFT 2006-1. Just one more bullet for this property to absorb.

Mall	CMBS Deal	Exposure	Store	City	State
Mall of the Mainland			Macy's	Texas City	TX
Parmatown Mall	GMACC 2004-C2	8.67%	Macy's	Parma	OH
Hickory Hollow			Macy's	Antioch	TN
Laurel Mall			Macy's	Laurel	MD
West Ridge Mall	BACM 2004-4	11.15%	Macy's	Topeka	KS
Mall of America	Multiple	see comment	Bloomingdale	Bloomington	MN
Oakbrook Home and Furniture			Bloomingdale	Oak Brook	IL
White Flint			Bloomingdale	North Bethesda	MD
Perimeter Mall			Bloomingdale	Atlanta	GA

GGP Victoria Ward Forgoes Extension (COMM 2006-C8)

Barclays highlighted this earlier in the week. Although Victoria Ward (Honolulu Retail) was modified during the GGP bankruptcy to move it's maturity date from this month to 2016, it paid off this month as originally scheduled. The modification also switched the loan over to an amortizing payment, from IO, and will definitely shorten the front-pays with a $86.5mm outstanding balance.

A2B is the current pay with $244mm outstanding. It was on a list on 9/22, but not sure where it traded.

Mall of America bucks the trend

And they're doing it with promotional Twitter and Blog spots... David Bodamer reports

It's in 3 deals (interestingly, they show three different NCF numbers, two different payment statuses, and various occupancy and other stats - the pari passu thing isn't a problem at all ) within CMBS. We'll just pick the financials from one at random since they disagree - YE 2008 DSCR 1.47x, Occupancy 90%, anchors include Macy's (9.99% GLA, expires 8/2015), Bloomingdales (7.9%, exp 8/2012), and NOrdstrom's (7.61%, expires 8/2022).