Banks Trading American Dream Debt for Mall of America Stock
Bankers are taking a minority stake in Triple Five Group’s Mall of America and West Edmonton Mall as a make good following a default on the firm’s American Dream mall complex, WWD has confirmed.
J.P. Morgan Chase, Goldman Sachs and a group of real estate investors are set to receive a 49 percent stake in the two mammoth malls after the New Jersey entertainment complex fell short.
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The Mall of America and West Edmonton was used as collateral for a loan to build American Dream. J.P. Morgan and Goldman Sachs declined to comment and Triple Five could not immediately be reached over the weekend.
The Financial Times earlier reported the deal, which could close soon, but is complex.
American Dream, which has been 20 years in the making and has seen repeated changes in ownership, in 2019 finally opened some of its marquee entertainments, including the Big Snow Ski and Snowboard Park. But the coronavirus lockdowns delayed the long-awaited opening of the retailing component last year and when the mall did open, it was launching into the pandemic.
It cost more than $6 billion to build the 3.3 million square foot complex, which also includes the world’s largest indoor wave pool, encompassing 1.5 acres.
The very best “A” malls with established businesses appear to be holding on in the pandemic, but much of the rest of the mall world is struggling.
American Dream, once called Xanadu, is a massive project with huge debts and needed a steady flow of business to keep its books balanced.
The banks and lenders that bet on that dream are now going to be owners in other mega retail projects. The Mall of America features more than 520 stores, eight acres of skylights, an aquarium, events and more. And the West Edmonton Mall has more than 800 stores, two hotels and 100-plus dining venues.
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