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Battered by the coronavirus pandemic, a distressed West Side mall owned by one of the largest U.S. retail landlords was foreclosed on this month by its lender.
An entity affiliated with Morgan Stanley acquired Ingram Park Mall at 6301 N.W. Loop 410 with a $100.7 million bid at a July 6 foreclosure auction.
Longtime owner Simon Property Group built the mall, totaling about 1.1 million square feet, more than 40 years ago.
The foreclosure sale occurred a month after Simon’s loan came due. A Simon spokeswoman didn’t respond to a request for comment Thursday, so it’s not clear if it attempted to refinance the property or if it simply decided it no longer wanted to own the mall.
The sale didn’t include store space owned by Dillard’s, JCPenney, Sears and Macy’s.
Malls across the country have been devastated by the COVID-19 outbreak. Restrictions depleted foot traffic and forced retailers to close stores for months, prompting them to seek rent relief from landlords. Customers, unable or hesitant to venture out, turned to online shopping.
Simon Property Group, an Indianapolis-based real estate investment trust, has turned over multiple malls to lenders during the pandemic, including properties on Ohio, Wisconsin and Connecticut, MarketWatch reported in November.
Citing the pandemic’s effects on malls and expectations of higher losses, Fitch Ratings in November downgraded a pool of loans that included the Ingram Park Mall — one of the largest loans in the portfolio.
Fitch cited the mall’s “downward trending performance metrics that include year-over-year occupancy and cash flow declines” and “limited leasing traction.”
A regulatory filing shows Simon had borrowed $122.3 million on the mall and owed roughly $9.7 million in principal and interest annually.
The assessed value on the mall’s real estate dropped from almost $84 million last year to $62.5 million this year, the Bexar Appraisal District’s website shows.
The mall was built in 1979 and was last renovated in 2018. It had already lost two major tenants prior to the pandemic: Dillard’s Home Center in 2016 and Sears in 2018, which together occupied about 248,465 square feet, according to Fitch.
Still, Simon reported Ingram Park Mall had an occupancy of 91.7 percent at the end of last year.
Big shopping centers in San Antonio have stayed largely full during the pandemic, in part because little new retail space is being built and new tenants are taking over vacant storefronts left behind by struggling retailers.
About 93.6 percent of the area’s retail space was occupied at mid-year, according to Dallas-based Weitzman. That’s unchanged from the latter half of 2020, and slightly lower than 94 percent in the first half of 2020 and 94.5 percent at the end of 2019.
Simon owned more than 200 retail properties at the end of last year. During the pandemic, it said it had agreed to defer or abate rental payments for a “number” of its tenants.
Ingram Park Mall’s sale means Simon no longer owns any malls in San Antonio. At one time, it also owned the Windsor Park Mall — now Rackspace Technology Inc.’s home — and Rolling Oaks Mall, owned by Washington Prime Group, a real estate investment trust spun off by Simon in 2014.
Simon’s nearest area holding is San Marcos Premium Outlets, a 735,000-square-foot retail property that it acquired in 2010.
The lender’s trustee declined to comment. A Morgan Stanley representative did not respond to an inquiry Thursday.
madison.iszler@express-news.net
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