More Mall Mortgage Woes
by January 11, 2010 12:00 am 88 views
After losing one mall to foreclosure last April, Midwest Mall Properties LLC is trying to rework the mortgage on their remaining two malls, including the Northwest Arkansas Mall in Fayetteville.
Developers John J. Flake, Doyle Rogers and Sam Mathias formed Midwest Mall Properties in 2006 to purchase the Northwest Arkansas Mall, the Crossroads Mall in Oklahoma City and the Citadel Mall in Colorado Springs for $400 million.
The Crossroads Mall is now owned by the Federal Reserve by way of the failed Bear Stearns Cos., which held the $61 million mortgage.
According to the Wall Street Journal, Midwest asked the special servicer overseeing the $261 million securitized mortgage on the two malls to revise the loan’s terms and reduce debt-service payments. Midwest said that the malls no longer generate enough cash flow to cover their operating expenses and debt service.
In October, the loan was transferred to special servicer CWCapital Asset Management LLC, and the two malls were put up as collateral.
A Midwest spokesman told the Wall Street Journal that the company intends to retain the two malls.