Brookfield Dealing With Debt Issues At 8 Shopping Malls

Brookfield is facing financial distress at eight of its shopping mall properties, including a North Jersey mall on the verge of foreclosure.

The firm's Woodbridge Center mall in North Jersey is going through the foreclosure process after defaulting on its $225M loan, The Real Deal reported.

The default came after Brookfield lost anchor tenant Sears in April 2020, and by June the loan went into special servicing due to imminent default. In 2021, lender Rialto Capital Advisors sued to foreclose on the mall.

As of April, a receiver is still collecting rent from mall tenants, but the mall isn't performing well enough to cover its debt. The mall's occupancy stands at 63% and could fall even further. In 2014, the mall's value stood at $366M but has plummeted 77% to $86M, TRD reported.

Seven other mall assets in Brookfield's portfolio were also flagged for troubled debt, according to Trepp. These assets include three in the Midwest markets of Minnesota, Indiana and Michigan, and four East Coast properties in Virginia, South Carolina and Alabama.

Brookfield owns 125 malls across the country and has over 134M SF in retail space globally, according to its website.

Brookfield's mall assets aren't the only ones facing challenges with debt payments. 

In Downtown Los Angeles, the firm has seen two office buildings go into distressed situations. In April, Brookfield's Gas Co. Tower went into receivership with about $822M in debt set to mature by the end of 2023. In May, its EY Plaza was placed in receivership after Brookfield became delinquent on payments for its $275M CMBS loan.

The landlord also defaulted on a $161M loan in April tied to a 12-building office portfolio, primarily located in the D.C. suburbs.