Non-Performing Note Secured by a Dominant Regional Mall

Investment Highlights

• Resolution Opportunity: Acquring the Non-Perfoming Loan allows investors a wide array of potential resolution scenarios, either through a loan modification or Collateral foreclosure.
• Strong Concentration of National Retailers: The Mall features numerous unique-to-market retailers in the Bellingham trade area, including Target, Kohl’s, Dick’s Sporting Goods, Ulta Beauty, JCPenney, Macy’s, and H&M.
• Strategic Location with Expansive Trade Area: Located approximately 90 miles north of Seattle and 20 miles from the Canadian border providing an expansive trade area in excess of 30 miles. The 30-mile trade area population exceeds 370,000 residents that grows to more than 500,000 including Canadian residents.
• Established Demand Drivers: The Mall is the dominant retail center in NW Washington benefitting from its proximity to the Canadian border and nearby Western Washington University as well as substantial tourism.
• Durable In-Line Sales Productivity: Small shop sales have been consistently ~$400/SF going back to 2018 and trending up since a dip in 2020 due to Covid-19.
• Healthy and Sustainable Occupancy Costs: Average inline occupancy costs are approximately 11.2%, well within the benchmark range of occupancy costs for a regional mall generating inline sales of ~$400/SF.

Offering Summary 

Jones Lang LaSalle, in conjunction with RI Marketplace, is pleased to offer for sale a $72.236 million UPB non-performing loan (the “Loan”).   A first lien mortgage secures the Loan on a 536,354 SF portion (“Collateral”) of the 774,264 SF mall (“Mall”) in northwestern Washington, 1.5 hours north of Seattle and 25 minutes south of the Canadian border. The Loan was originated in June 2011 with payments made on a 30-year amortization schedule with a maturity date of February 2022. The Loan features a hard lockbox that has been in place since origination.  The Mall, constructed in 1988 and renovated in 2015, is currently 87.7% leased with inline sales of $396/SF as of the T-12 ending February 2022. Two of the five anchor spaces are included in the Collateral property, which includes Dick’s and Macy’s, while Target, JCPenney and Kohl’s are responsible for CAM.