It's a tough time to be in the shopping mall business.
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The shopping mall apocalypse is creating a $48 billion disaster on Wall Street
Investors in malls are finding out their investments may not work out as expected.
Black Friday sales last year provided the latest proof of changing dynamics in the retail sector as consumers continued to move their shopping online.
Commercial mortgage-backed securities, known on Wall Street at CMBS, are securities backed by commercial mortgages on real estate like shopping malls. And when an anchor tent decides to close and leave a real estate complex, it can put the loans backing the entire mall at risk.
For example, JCPenney recently outlined plans to close 140 stores. Morningstar Credit Ratings identified 39 locations it thought were likely to close, and found about $7.3 billion in loans securitized in CMBS could be impaired as a result. That's because m
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The January disposition of the 765,465-square-foot mall in Kingston, New York, resulted in $9.4 million of proceeds, representing an 89.2% discount to the original appraised value and resulting in an 86.1% loss severity," Morningstar said.
Some investors are looking for
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