• Blog
  • Retail
  • Retail is Distressed, But What About Retail Property Loans?

Retail is Distressed, But What About Retail Property Loans?

Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
Share on email
Share on print

Observers of the U.S. retail industry realize significant risk signals are showing up, in large part due to a shift in the way consumers shop for and purchase goods — namely the rise of e-commerce. The result has been increasing financial distress on traditional brick-and-mortar stores, most notably at large multistore regional malls. But how much do these at-risk signals extend to loans across the entire spectrum of retail assets?

While an October 2018 report from financial services firm Brown Brothers Harriman indicated that just 1.7 percent of outstanding CMBS loans for malls were tagged as distressed and while delinquencies for retail CMBS loans are on the decline, this doesn’t mitigate the fact that hundreds of loans for retail properties — CMBS and others — are distressed.

A June 2019 review of CrediFi data shows over 1,900 retail loans across the country were recognized as distressed, making it more likely that some borrowers may not be able to keep up with their financial obligations. Furthermore, CrediFi has begun tracking “at-risk signals” on other retail loans. Together, these loans cover a wide swath of the retail landscape: community centers, lifestyle centers, strip centers, neighborhood centers, factory outlets, super-regional malls and regional malls.

While certain types of retail properties are performing well — for instance, grocery-anchored centers remain very much in favor with investors and lenders — other types of retail properties are lagging, namely traditional malls. It should come as no surprise, then, that four of the 10 largest distressed retail loans in our review were associated with regional malls — malls that have been hit hard by retail bankruptcies.

One of those regional malls is The Shoppes at Buckland Hills in Manchester, Connecticut. Among the reasons that the mall’s $130 million CMBS refinance loan originated in March 2012 is likely to continue to be at risk is that the lease of troubled retailer Macy’s — which occupies 144,650 square feet (11% of GLA) and is the major tenant at the mall — expires less than two years from now, in March 2022.

Our review uncovered at-risk signals on loans at retail properties from coast to coast — states like Colorado, Illinois, Louisiana, Maryland, Montana, New York, Ohio, Pennsylvania, Texas and Washington, to name a few.

Although some malls are being repurposed and neighborhood and strip centers continue to do well overall, it looks as though we haven’t seen the end of distressed retail loans, particularly those connected to malls. The problem is that nearly 800 big-box anchors tenants remain vacant at U.S. malls, according to Forbes.com. Coresight Research estimates that store closure announcements in the U.S. could reach 12,000 by the end of 2019, more than double the number of announced closures in 2018.

Therefore, it is imperative for commercial financial professionals to actively monitor CMBS mall loans. The CMBS loans on regional and outlet malls that are coming due within the next several years could significantly jeopardize the retail lending environment and lead to millions in losses for lenders, owners, and investors. If lenders curtail their retail lending and liquidity dries up, it may become increasingly difficult for mall owners to sell their properties, even at rock-bottom prices. With no way out and values below balances, owners might start walking away from assets, leaving lenders with growing REO counts.

The good news is that unlike 2008, when there was little data and intelligence available until it was too late, there is now sufficient data and intelligence to make smart decisions before problems spin out of control. The challenge and opportunity for those in decision-making positions is to dig into available data and closely watch distressed loans.

Download our 2019 CRE Lending & Bank Risk report to learn more about the banking system’s exposure to retail lending.

Related stories:

View from the Top: CRE Risk in the Banking System
Although Industrial Lending Has Tapers Off, Sector Still Exhibits Strength
Even Amid a Shifting Landscape, Opportunities Exist in the Retail Sector

Close Menu

Request a demo today.

Find out how you can discover more opportunities with access to the most comprehensive CRE financing database.







Request a demo today.

Find out how you can discover more opportunities with access to the most comprehensive CRE financing database.







Find out how our data can help you discover more lending opportunities.
Speak with a CredifX representative today.





INCREASE YOUR LENDING OPPORTUNITIES. SPEAK WITH A CREDIFX REPRESENTATIVE TODAY.





SUBMIT YOUR REQUEST FOR COMMERCIAL REAL ESTATE FINANCING


Find out how our data can help you discover more lending opportunities.
Speak with a CredifX representative today.





SUBMIT YOUR REQUEST FOR COMMERCIAL REAL ESTATE FINANCING





SUBMIT YOUR REQUEST FOR COMMERCIAL REAL ESTATE FINANCING


SUBMIT YOUR REQUEST FOR COMMERCIAL REAL ESTATE FINANCING


Mary Kovac Goldberg (Parrino)

Head of Customer Success

Mary has over 25 years of experience in sales and customer engagement, including more than a decade at Thomson Reuters. She is the former head of client services at Complinet, a global compliance and risk software company that was acquired by Thomson Reuters, and led account management for over 15 years at NYSE/Sector’s outsourcing services division. Mary has an MBA in information systems from Pace University and a bachelor’s of science in computer science from Hofstra University.  

David Libman

Head of Product

David Libman, a fintech and investment professional with 20 years’ experience in fields including finance, technology, new business development and real estate investments, is head of product at CrediFi. Previously, David was a vice president at New York-based iCapital Network, a financial technology platform for alternative investments, and director of acquisitions at Fieldstone Properties, a private real estate investment firm focused on investment-grade multifamily property. David is also the founder and former CEO of Globerex, the first real estate equity online marketplace.  

book your personalized
cre data consult today.

Gain access to CRE finance data.



















Request a CrediFi
demo today.

Gain access to CRE finance data.


















Request a credifi demo today.

Find out how CrediFi brings together cutting-edge technology and data science to develop the most comprehensive CRE financing database






SUBMIT YOUR REQUEST FOR COMMERCIAL REAL ESTATE FINANCING


Request a demo today.

Find out how you can discover more opportunities with access to the most comprehensive CRE financing database.







Book your personalized
CRE data consult today.

Gain access to CRE finance data on 6M properties & 4M loans.





Book your personalized
CRE data consult today.

Gain access to CRE finance data.


















Request a CrediFi demo today.

Find out how you can discover more opportunities with access to the most comprehensive CRE financing database.



















Request a CrediFi demo today.

Find out how you can increase your deal flow with access to the most comprehensive CRE financing database.



















Request a CrediFi demo today.

Find out how you can spot risk early to make more informed trading decisions.



















Request a CrediFi demo today.

Find out how you can discover more lending opportunities with access to the most comprehensive CRE financing database.



















Book your personalized
CRE data consult today.

Gain access to CRE finance data.


















Request a CrediFi demo today.

Find out how you can discover more opportunities with access to the most comprehensive CRE financing database.







Request a CrediFi demo today.

Find out how you can discover more opportunities with access to the most comprehensive CRE financing database.



















Discover new opportunities.
Speak with a CredifX representative today.





Increase your lending opportunities.
Speak with a CredifX representative today.





Demo our up-to-date
ownership & contact
information.





We track finance data
on all U.S. markets.
Which market's CRE data
would you like to demo?





We track over
10,000 CRE lenders.
What data would
you like to demo?





Request a CrediFi
demo today.

Gain access to CRE finance data on 6M properties & 4M loans.





Request a CrediFi
demo today.

Gain access to CRE finance data on 6M properties & 4M loans.





Find the lenders who
give you the best terms –
not just the ones you
already know.

Gain access to CRE finance data on 6M properties & 4M loans.





Secure the financing
you need.





Request a CrediFi
demo today.

Gain access to CRE finance data on 6M properties & 4M loans.





Book your personalized
CRE data consult today.

Gain access to CRE finance data on 6M properties & 4M loans.





View Madison Realty
Capital's lending profile,
documenting recent loan,
owner and property information.





How would you like
your CRE data
delivered?





Demo our up-to-date
lender, owner & contact
information.





Demo our up-to-date loan,
ownership & contact
information.





Book your personalized
CRE data consult today.

Gain access to CRE finance data on 6M properties & 4M loans.





Request a CrediFi
demo today.

Gain access to CRE finance data on 6M properties & 4M loans.





Book your personalized
CRE data consult today.

Gain access to CRE finance data on 6M properties & 4M loans.





Alex Veksler

Head of Content

Alex Veksler has 16 years of finance, data analysis and project management experience. He is a former vice president at Morgan Stanley, where he worked on product control of equity and fixed-income derivatives products as well as various projects involving finance and technology, such as revamping risk attribution and balance-sheet systems for profits and losses. Alex has previously worked at hedge funds, most recently as a director at Exigent Capital. He has a bachelor’s in computer science from Yeshiva University and an MBA from New York University.

Ely Razin

CEO

Ely Razin founded CrediFi in 2014 with Battery Ventures. A rare combination of seasoned corporate executive and technology entrepreneur, Ely previously served as global head of board governance for Thomson Reuters Accelus and head of business law for Thomson Reuters, after the software company he founded was acquired in 2004. The company, Expert Ease Software, developed AI-based software that automatically summarizes key deal terms for transactions in fields including capital markets, M&A and real estate. Ely began his career as a corporate and securities lawyer, and holds an LLB and MBA from York University.

Amichai Levy

VP R&D

Amichai Levy is the former VP of R&D at Israeli high-tech firm Payoneer, where he developed its signature cross-border payment platform and integrated it with existing bank technology. In his prior role at Ness Technologies, Amichai was a key player in developing an electronic case filing system for Israel’s courts. He has over 20 years of experience in software engineering.

David Fajgman

Head of Finance

David Fajgman brings over 14 years of financial and managerial experience to CrediFi. Prior to joining the CrediFi team, he served as finance director of Bioness Neuromodulation Ltd., which develops and manufactures medical devices involved in neurological rehabilitation. He has previously worked in multiple finance roles at Thomson Reuters and as an accounting and consulting manager at Ernst & Young, where he was responsible for a wide range of clients, including companies listed on the Nasdaq and privately held high-tech companies. David is an Israel-licensed certified public accountant and has a bachelor’s degree in business and accounting.

Liat Bar David

Head of Human Resources

Liat Bar David has over nine years of human resources experience, primarily focused on the high-tech industry. She is a former HR business partner at semiconductor solutions provider Broadcom, where she was responsible for onboarding processes, benefits, policies, training and development, performance management and employee retention. Liat holds a bachelor’s in communication and human services and a master’s in human resources and services, both from the University of Haifa.