Tired shopping malls are being handed over to lenders for damage control

Westfield, in particular, wants to sell a certain amount of its US assets to deal with the debts incurred due to portfolio purchases made in New York and San Francisco

In the US, some of the investors are gearing to purchase real estate that was previously regional shopping malls. Landlords must find new ways to counter this to do some damage control to their stock prices. Since 2017, malls in the US have lost at least a third of their value, and the ongoing pandemic has boosted the shift to online channels. Some of the best malls, like the ones with luxury brands, are doing fine. Sales have managed to recover, and renewal of debts is also underway. Some of the real estate owners are trying their best to exit the market.

Westfield, in particular, wants to sell a certain amount of its US assets to deal with the debts incurred due to portfolio purchases made in New York and San Francisco. Westfield’s borrowings are now way 16.6 times higher than projected earnings pre depreciation, tax, interest, and amortization. Some of the major landlords have now handed over their keys to cut losses on the weakest locations. The mall owned by Westfield is valued at $85 million now against the $125 million outstanding debt. Since COVID 19’s inception, more than 20 US malls have been handed over to lenders.