Contrasts in Brookfield Properties / default or fully tenanted

Post Reply
SamSpade
Store Manager
Store Manager
Posts: 1847
Joined: September 13th, 2015, 4:39 pm
Has thanked: 893 times
Been thanked: 135 times
Status: Offline

Contrasts in Brookfield Properties / default or fully tenanted

Post by SamSpade »

This thread is probably mostly about the fact that the mall owner is defaulting on its loans for Clackamas Town Center, one of only three large regional malls in the Portland-Vancouver-Hillsboro metropolitan area.
In other parts of the country, it seems like most closing/failing malls were either rural, lost weak anchors, aging and/or in an area that was over-centered. This region is largely not, with only 4 large centers, relatively well positioned from each other. (I included Lloyd Center as one of the four, but we all know it is not a regional draw in any capacity and marked for redevelopment)

Brookfield is sending Clackamas Town Center's value back to its lenders. CTC opened in 1981. It was updated in 2007 to remove an indoor ice rink and add "lifestyle" elements to the exterior, including some new stores like REI.

In 2020, Nordstrom closed. Sears closed and one level reopened as Dick's Sporting Goods. Some unique additions appeared, such as bonchan fried chicken.

The Macy's company currently leases two boxes, and the one is a former Montgomery Ward that houses the home and Backstage departments.

Apparently some anchor leases are coming up and the company appears concerned about the center's long-term health.
The report shows that leases for the Macy’s, Macy’s Home Store, JCPenney and a now-shuttered Nordstrom space are set to expire in October.
Portland Business Journal: Clackamas Town Center Owner Defaults

in contrast, eastern Idaho has a medium sized mall that opened in 1984, the Grand Teton Mall, that is almost fully occupied and replaced its loss of Macy's with Dick's Sporting Goods. When Sears vacated, the store did take on a new use (charter school) but junior anchors Old Navy, and Barnes and Noble alongside legacy anchors JCPenney and Dillards remain, restaurants line the outparcels, and the building looks good inside and out.
Super S
Posts: 2910
Joined: April 1st, 2009, 9:27 pm
Has thanked: 21 times
Been thanked: 103 times
Status: Offline

Re: Contrasts in Brookfield Properties / default or fully tenanted

Post by Super S »

SamSpade wrote: January 14th, 2025, 9:10 am This thread is probably mostly about the fact that the mall owner is defaulting on its loans for Clackamas Town Center, one of only three large regional malls in the Portland-Vancouver-Hillsboro metropolitan area.
In other parts of the country, it seems like most closing/failing malls were either rural, lost weak anchors, aging and/or in an area that was over-centered. This region is largely not, with only 4 large centers, relatively well positioned from each other. (I included Lloyd Center as one of the four, but we all know it is not a regional draw in any capacity and marked for redevelopment)

Brookfield is sending Clackamas Town Center's value back to its lenders. CTC opened in 1981. It was updated in 2007 to remove an indoor ice rink and add "lifestyle" elements to the exterior, including some new stores like REI.

In 2020, Nordstrom closed. Sears closed and one level reopened as Dick's Sporting Goods. Some unique additions appeared, such as bonchan fried chicken.

The Macy's company currently leases two boxes, and the one is a former Montgomery Ward that houses the home and Backstage departments.

Apparently some anchor leases are coming up and the company appears concerned about the center's long-term health.
The report shows that leases for the Macy’s, Macy’s Home Store, JCPenney and a now-shuttered Nordstrom space are set to expire in October.
Portland Business Journal: Clackamas Town Center Owner Defaults

in contrast, eastern Idaho has a medium sized mall that opened in 1984, the Grand Teton Mall, that is almost fully occupied and replaced its loss of Macy's with Dick's Sporting Goods. When Sears vacated, the store did take on a new use (charter school) but junior anchors Old Navy, and Barnes and Noble alongside legacy anchors JCPenney and Dillards remain, restaurants line the outparcels, and the building looks good inside and out.
They say that there will be "no impact on shopping center operations" at Clackamas. However, I have been wondering for a while about how viable the Home Store (the old Wards) is, and still have the feeling that we could see Macy's consolidate back in to one building.

Clackamas has the advantage of being the only viable mall left on the east side of the Portland area, but had a few hiccups during the pandemic.

It is interesting though to watch how Vancouver Mall is holding its own when you consider the sales tax factor. The Macy's there is one of the better looking stores in the area, which received a remodel and expansion just as the name change from Meier & Frank to Macy's took place. And JCPenney kept this store open while they closed the newer freestanding location in East Vancouver.
babs
Store Manager
Store Manager
Posts: 1091
Joined: December 20th, 2016, 3:08 pm
Has thanked: 46 times
Been thanked: 169 times
Status: Offline

Re: Contrasts in Brookfield Properties / default or fully tenanted

Post by babs »

Super S wrote: January 14th, 2025, 9:32 am
SamSpade wrote: January 14th, 2025, 9:10 am This thread is probably mostly about the fact that the mall owner is defaulting on its loans for Clackamas Town Center, one of only three large regional malls in the Portland-Vancouver-Hillsboro metropolitan area.
In other parts of the country, it seems like most closing/failing malls were either rural, lost weak anchors, aging and/or in an area that was over-centered. This region is largely not, with only 4 large centers, relatively well positioned from each other. (I included Lloyd Center as one of the four, but we all know it is not a regional draw in any capacity and marked for redevelopment)

Brookfield is sending Clackamas Town Center's value back to its lenders. CTC opened in 1981. It was updated in 2007 to remove an indoor ice rink and add "lifestyle" elements to the exterior, including some new stores like REI.

In 2020, Nordstrom closed. Sears closed and one level reopened as Dick's Sporting Goods. Some unique additions appeared, such as bonchan fried chicken.

The Macy's company currently leases two boxes, and the one is a former Montgomery Ward that houses the home and Backstage departments.

Apparently some anchor leases are coming up and the company appears concerned about the center's long-term health.
The report shows that leases for the Macy’s, Macy’s Home Store, JCPenney and a now-shuttered Nordstrom space are set to expire in October.
Portland Business Journal: Clackamas Town Center Owner Defaults

in contrast, eastern Idaho has a medium sized mall that opened in 1984, the Grand Teton Mall, that is almost fully occupied and replaced its loss of Macy's with Dick's Sporting Goods. When Sears vacated, the store did take on a new use (charter school) but junior anchors Old Navy, and Barnes and Noble alongside legacy anchors JCPenney and Dillards remain, restaurants line the outparcels, and the building looks good inside and out.
They say that there will be "no impact on shopping center operations" at Clackamas. However, I have been wondering for a while about how viable the Home Store (the old Wards) is, and still have the feeling that we could see Macy's consolidate back in to one building.

Clackamas has the advantage of being the only viable mall left on the east side of the Portland area, but had a few hiccups during the pandemic.

It is interesting though to watch how Vancouver Mall is holding its own when you consider the sales tax factor. The Macy's there is one of the better looking stores in the area, which received a remodel and expansion just as the name change from Meier & Frank to Macy's took place. And JCPenney kept this store open while they closed the newer freestanding location in East Vancouver.
You both missed the real issue here.

It was last purchased in 2002 by a joint venture between the Teachers’ Retirement System of the State of Illinois and General Growth Properties Inc. called GGP-TRS LLC, for $634 million.

The loan balance, which is split in two tranches, was originated for $216 million by Bank of America in September 2012.

Clackamas Town Center was last appraised at $342 million in 2022, down 7.5% from its $370 million valuation in 2012,


Loan balance does not usually match up with valuation. My guess is that this thing is so overvalued on the books, they want to have the lender take a haircut over the drop in valuation. They're betting it will not be foreclosed and go on auction. This has very little to do with Portland market dynamics and more to do with financial gamesmanship.

The mall isn't going anywhere and all the anchors will re-up...although I agree that the Macy's Home Store is probably redundant but I'm not sure they want to spend the money at this time to remodel their existing store to make room for it. And that Backstage seems to do pretty well since it is right at the front of the store, hiding the home store behind it.
buckguy
Store Manager
Store Manager
Posts: 1254
Joined: January 31st, 2017, 10:54 am
Has thanked: 10 times
Been thanked: 118 times
Status: Offline

Re: Contrasts in Brookfield Properties / default or fully tenanted

Post by buckguy »

babs wrote: January 14th, 2025, 9:48 am [quote="Super S" post_id=68313 time=<a href="tel:1736875932">1736875932</a> user_id=177]
[quote=SamSpade post_id=68311 time=<a href="tel:1736874629">1736874629</a> user_id=2835]
This thread is probably mostly about the fact that the mall owner is defaulting on its loans for Clackamas Town Center, one of only three large regional malls in the Portland-Vancouver-Hillsboro metropolitan area.
In other parts of the country, it seems like most closing/failing malls were either rural, lost weak anchors, aging and/or in an area that was over-centered. This region is largely not, with only 4 large centers, relatively well positioned from each other. (I included Lloyd Center as one of the four, but we all know it is not a regional draw in any capacity and marked for redevelopment)

Brookfield is sending Clackamas Town Center's value back to its lenders. CTC opened in 1981. It was updated in 2007 to remove an indoor ice rink and add "lifestyle" elements to the exterior, including some new stores like REI.

In 2020, Nordstrom closed. Sears closed and one level reopened as Dick's Sporting Goods. Some unique additions appeared, such as bonchan fried chicken.

The Macy's company currently leases two boxes, and the one is a former Montgomery Ward that houses the home and Backstage departments.

Apparently some anchor leases are coming up and the company appears concerned about the center's long-term health.
The report shows that leases for the Macy’s, Macy’s Home Store, JCPenney and a now-shuttered Nordstrom space are set to expire in October.
Portland Business Journal: Clackamas Town Center Owner Defaults

in contrast, eastern Idaho has a medium sized mall that opened in 1984, the Grand Teton Mall, that is almost fully occupied and replaced its loss of Macy's with Dick's Sporting Goods. When Sears vacated, the store did take on a new use (charter school) but junior anchors Old Navy, and Barnes and Noble alongside legacy anchors JCPenney and Dillards remain, restaurants line the outparcels, and the building looks good inside and out.
They say that there will be "no impact on shopping center operations" at Clackamas. However, I have been wondering for a while about how viable the Home Store (the old Wards) is, and still have the feeling that we could see Macy's consolidate back in to one building.

Clackamas has the advantage of being the only viable mall left on the east side of the Portland area, but had a few hiccups during the pandemic.

It is interesting though to watch how Vancouver Mall is holding its own when you consider the sales tax factor. The Macy's there is one of the better looking stores in the area, which received a remodel and expansion just as the name change from Meier & Frank to Macy's took place. And JCPenney kept this store open while they closed the newer freestanding location in East Vancouver.
[/quote]
You both missed the real issue here.

It was last purchased in 2002 by a joint venture between the Teachers’ Retirement System of the State of Illinois and General Growth Properties Inc. called GGP-TRS LLC, for $634 million.

The loan balance, which is split in two tranches, was originated for $216 million by Bank of America in September 2012.

Clackamas Town Center was last appraised at $342 million in 2022, down 7.5% from its $370 million valuation in 2012,


Loan balance does not usually match up with valuation. My guess is that this thing is so overvalued on the books, they want to have the lender take a haircut over the drop in valuation. They're betting it will not be foreclosed and go on auction. This has very little to do with Portland market dynamics and more to do with financial
[/quote]

This makes sense. Brookfield is not an orthodox real estate firm. It’s part of a complex asset management business. They bought GGP and what was left of Forest City (which had malls and large multi-use projects) before COVID. I noticed that they also bought a lot of foreign real estate at the same time, as well. They’re probably being pushed to increase their cash flow and reduce debt by their parent.
Post Reply