Simon Property Group Inc (SPG)

[newair]

The Mall at the Source defaults on $124M loan [Newsday, Melville, N.Y.]
12:15 p.m. 03/28/2009 By Keiko Morris, Newsday, Melville, N.Y. Provided By Knight Ridder/Tribune

Mar. 28--The owners of the Mall at The Source in Westbury have defaulted on a $124-million interest-only balloon loan, according to a Manhattan-based firm that tracks commercial mortgage-backed security transactions.

The mall -- where stores of bankrupt retailers Fortunoff and Circuit City are liquidating their goods and where Steve & Barry's once had a location -- had a 10-year-old balloon loan that matured on March 11, said Thomas Fink, senior vice president of Trepp, which tracks the performance of commercial real estate loans that have been securitized. The loan servicer, LNR Properties of Miami, listed the loan as a nonperforming mature balloon loan, he said, which means the servicer does not expect the balance of the loan to be paid.

It originally was issued in 1999 by Nomura, and the owner of the mall is listed as W&S Associates. Records from the New York State Department of State show the address of W&S as the Simon Property Group (SPG), owner of the Roosevelt Field Mall, Walt Whitman Mall and Smith Haven Mall. The records were unclear regarding the ownership composition of W&S.

No one at Simon Property (SPG) was immediately available for comment Friday evening.

"What's been happening is that more and more commercial properties have been having trouble refinancing balloon payments that are coming due," Fink said. "There's no market right now or the market is not giving them the proceeds or the rate they want to refinance the mortgage."

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