American Dream megamall and entertainment complex in East Rutherford, N.J. After more than 17 years in the making, it finally opened October 25, 2019. Then came the coronoavirus pandemic.
Timothy A. Clary | AFP | Getty Images
Lenders that back the American Dream megamall in New Jersey are nearing taking a 49% stake in two other malls that are owned by the developers, Triple Five Group, according to a report in the Financial Times.
Triple Five used the other retail properties as collateral for its $1.2 billion construction loan at American Dream, which still is not fully open after years of on-and-off construction and multiple owners.
The loan that was defaulted on is held by J.P. Morgan, Goldman Sachs, Starwood Capital, CIM Group, Soros Fund Management, Wafra and iStar, according to the report in the FT, which cited people familiar with the matter. The restructuring is expected to close soon, it said, though the process could still be delayed.
A representative from Triple Five didn’t immediately respond to CNBC’s request for comment.
Triple Five previously during the Covid pandemic defaulted on its $1.4 billion Mall of America mortgage, missing months of payments. It was struggling to pay its bills when tenants including retailers and restaurants weren’t paying their rent on time. It recently reached a deal with lenders, however, to avoid foreclosure of the property and the loan was made current as of December.
The health crisis brought a whole new range of obstacles to the American Dream megamall, which has been decades in the making. On March 16, 2020 — just three days ahead of the grand opening of dozens of retail stores at the complex — the 3-million-square-foot complex shut down because of pandemic-related restrictions. Some of the entertainment venues, including a massive indoor water park, have since reopened, but at limited capacity.
More openings are still slated at American Dream later this year, including its Sea Life Aquarium and Legoland Discovery Center.