Mall of America, the biggest in the U.S., had its value cut by 16 percent in a new appraisal as the pandemic added to the struggles it already was facing from changing shopping habits, Bloomberg News reported. The 5.6 million-square-foot mall outside Minneapolis was reappraised at $1.94 billion, reduced from $2.31 billion, according to a monthly report on the property’s debt filed by trustee Wells Fargo & Co. Malls suffered from the bankruptcies of apparel and department stores as consumers turned more to online shopping, a trend that’s accelerated since the coronavirus forced many businesses to shut their doors in March. Reappraisals are required under the terms of many contracts for commercial mortgage-backed securities when loans are delinquent. Hotel and retail properties have had the highest delinquency rates, leading to transfers to workout specialists, known as special servicers. About 24 percent of hotel and 14 percent of retail CMBS debt was managed by special servicers in July, according to industry tracker Trepp. The Mall of America appraisal came after the owners, the Ghermezian family, missed three monthly payments on its $1.4 billion in bond debt.
