- Macerich is finalizing an $85M fixed-rate loan to refinance The Mall of Victor Valley’s $115M debt, which is due September 1st.
- The move is part of Macerich’s broader plan to slash $2B in debt under the Path Forward initiative.
- Despite challenges, The Mall of Victor Valley remains a key regional player with 99% occupancy and significant tenant presence.
- Macerich continued negotiations after defaulting on a $300M loan for Santa Monica Place, highlighting ongoing restructuring efforts.
Macerich (MAC), the Santa Monica-based REIT, is almost done with a $115M refinance of The Mall of Victor Valley in California’s High Desert, as reported in The Real Deal.
The refi is part of the company’s broader strategy to reduce $2B in debt, following a sizeable default on another major property.
Refinance Details
The $115M loan for The Mall of Victor Valley, due on September 1st, is being replaced with a 10-year, $85M fixed-rate loan expected to carry a mid-6% interest rate, according to CFO Scott Kingsmore.
Despite the mall’s age, it boasts a 99% occupancy rate and is considered a vital asset in the High Desert community. With anchor tenants like Dick’s Sporting Goods, Macy’s, JCPenney, and Cinemark, the mall is seen by Macerich as an important regional player.
“It’s an asset that we still believe is relevant,” said Kingsmore, emphasizing the mall’s strategic value despite it not being among the company’s top 10 assets.
Zooming Out
The refi is part of Macerich’s Path Forward initiative, introduced by CEO Jack Hsieh in May, which aims to cut about $2B in debt. This plan includes marketing certain properties and handing back others, such as the Country Club Plaza in Kansas City and the recently defaulted Santa Monica Place.
In April, Macerich defaulted on a $300M loan for Santa Monica Place. While negotiations with the lender are ongoing, CFO Scott Kingsmore admitted the asset faces challenges and an upside-down capital structure. Macerich will continue managing Santa Monica Place for at least another year as talks proceed.
What’s Next
By the end of 2024, Macerich expects to achieve significant debt relief, aiming for $1B to $1.4B in reductions. The Path Forward initiative focuses on bolstering the company’s top-tier and mid-range properties, termed Fortress and Steady Eddy retail centers.
