The 5.6 million-square-foot Mall of America in Bloomington, Minnesota — the biggest mall in the U.S. — was ordered closed on March 17, and like millions of other businesses, its owners are struggling to make rent or mortgage payments.
The mall has missed two months of payments on its $1.4 billion commercial mortgage-backed security as covid-19 shutdowns cause havoc in the retail industry.
Mall owners reported dismal April rent collections, including about 12 percent for Tanger Factory Outlet Centers Inc., 20 percent for Brookfield Property Partners LP and 26 percent for Macerich Co., Bloomberg reported.
Wells Fargo, which services the Mall Of America loan, told Bloomberg, “The loan is currently due for the April and May payments … Borrower has notified master servicer of Covid-19 related hardships.”
Mall of America isn’t just a landmark. It’s Minnesota’s biggest landmark, the No. 1 tourist destination in the Midwest, and it attracts more than 40 million annual visitors — that’s eight times the state’s population. Tourists spend an average of $162 per visit, according to Triple Five, the Edmonton, Canada-based conglomerate that owns the mall.
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Triple Five is owned by the Iranian-Canadian Jewish Ghermezian family. Originally from Tehran, the family immigrated to Canada in 1959, fearing instability in the Shah’s regime.
If every visitor to the mall spends $162 per visit, then mall retailers have lost more than $1 billion by being shut down for two months.
Plans for reopening the mall at 50 percent capacity have been posted to begin June 1, starting with retailers, followed later by food services and attractions, such as the mall’s aquarium, movie theater, indoor theme park and miniature golf course.
“Reopening a building the size of Mall of America is no small task, but we are confident taking the necessary time to reopen will help us create the safest environment possible,” the mall said in a statement on its website.
While reopenings mark a major step toward getting retail back on its feet, it will be a while before mall traffic returns to normal, Barrons reported.
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Placer.ai is a location-data analytics company that tracks consumer foot traffic through more than 30 million mobile devices in the U.S.
Barrons asked the company to look at the total number of visits at eight shopping malls in Georgia, Texas, Utah, South Carolina, Tennessee, Florida, and Missouri during the first 11 days of May, compared with the same period in 2019. All seven states have partly reopened.
The malls showed early signs of a comeback with momentum building, but visits are still down 75 percent.
“Foot traffic doesn’t directly translate into sales, but the two usually have a strong correlation,” Barrons reported.