Investors foreclose on Southland Mall in Cutler Bay for defaulting on payment
The COVID-19 pandemic has claimed its first Miami-Dade indoor shopping mall.
Southland Mall, the 986,100-square-foot indoor mall at 20505 S. Dixie Highway in Cutler Bay, is the first major shopping center to be foreclosed due to the coronavirus outbreak.
In a lawsuit filed on June 1 in Miami-Dade Circuit Court, Wells Fargo Bank charges the mall, which is owned by the Delaware-based Investcorp US Real Estate LLC, of defaulting on its $67.5 million loan. The LLC is owned by the New York-based Investcorp International Realty, an investment firm founded in 1982 with holdings around the world.
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According to court documents, JPMorgan Chase Bank, National Association made a $67.5 million loan to Investcorp on May 2, 2014. The loan, which was classified as a Commercial Mortgage Backed Securities financing (CMBS), is essentially a syndicated mortgage held by a trust made up of various banks and lenders. The mall is the collateral for the loan.
On June 7, 2019, Investcorp secured an extension agreement that pushed the maturity date of the loan back to May 8, 2020.
But Investcorp was unable to make its April 9 payment last month, battered by the coronavirus shutdown and the brick-and-mortar retail slump that shuttered one of its three anchor stores (Sears). Two of its other anchors, Macy’s and JCPenney, have also been highly stressed and have closed stores around the U.S. over the last year.
When the loan matured on May 8, the trustee for the CMBS filed the $67.5 million suit against the mall, which includes accrued interest and legal fees. Wells Fargo is the trustee.
The foreclosure was first reported by The Real Deal.
The foreclosure marks another gloomy chapter in the ongoing slide of traditional retail. Even before the pandemic, brick-and-mortar retailers struggled with online competition and shifting consumer habits, forcing Bloomingdales to shutter its Falls store and Pier 1 to declare bankruptcy.
According to its current website, Southland Mall houses 71 retailers, including Ross Dress For Less, Sephora and Men’s Wearhouse, along with 18 casual/fast-food restaurants such as Applebee’s and Teriyaki Ninja. Most of the businesses have resumed operations since the mall reopened on May 21.
The mall is also home to Regal Southland Mall cinema, which remains closed.
Southland Mall, formerly known as Cutler Ridge Mall, opened in 1978 as an extension of the Cutler Ridge Shopping Center, which opened in 1960. The mall was devastated by Hurricane Andrew in 1992, reopened the following year and was renamed Southland Mall in 2003. Fort Lauderdale-based property management firm Gumberg Asset Management, which manages the mall, declined to comment.
This story was originally published June 10, 2020 at 6:10 PM.
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