There’s been continuous news about retailers closing dozens of stores or even shutting down completely over the past few years. Owners of shopping malls are having to get creative and reimagine their centers in order to survive shoppers’ changing habits.
Unfortunately, Mall at Stonecrest’s situation is becoming part of the national retail narrative than an anomaly. In a metro area that business magazines often touted as ‘over-malled’, it’s not surprising that the Mall at Stonecrest is facing imminent foreclosure.
Southeast DeKalb retail grows up
When the long-planned Mall at Stonecrest opened in 2001, after nearly twenty years of dirt-turning, and rhetoric, the area was touted as the economic engine that could…and would lift this part of south DeKalb. Stores and restaurants sprouted up all around the mall, and then over time, some would close. Most of the closed stores were part of retail reorganizations and the start of the weakening of retail rather than a barometer of the area’s lack of support.
In metro Atlanta, the malls that are doing relatively well are Lenox Square, Perimeter Mall, Cumberland Mall, Mall of Georgia and Phipps Plaza. One thing these malls have in common is they all have been massively updated on a regular basis.
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How did we get here?
The owners of the Mall at Stonecrest took out a $92M commercial mortgage-backed security loan, secured by less than 31% of the total square footage of the mall (370K square feet out of 1.2M square foot). The loan has been in special servicing since early 2013, and in and out of delinquency several times during 2019.
Urban Retail Partners attempted to sell to an unnamed buyer in early 2019, but after the potential buyer’s financing fell through, the mall’s owner and the special loan servicer agreed to a modification structure by mid-2019. After failing to reach an agreement in late 2019, the special servicer threatened to foreclose in February.