Eastland Center misses loan payment
A missed loan payment could mean financial trouble for Eastland Center.
The mall's owner, New York-based Ashkenazy Acquisition Corp., missed its April payment on a $37.43 million loan balance for the Harper Woods mall, according to Trepp LLC, a New York-based company that tracks commercial mortgage-backed securities.
The Ashkenazy Acquisition Corp. also owned Northland Center in Southfield, which closed its doors last month.
The loan was transferred in March to Needham, Mass.-based CWCapital Asset Management LLC for special servicing due to imminent default, said Sean Barrie, a research analyst for Trepp.
"When a servicer is called in, the main objective is to take account of all the financials," Barrie said. "The first thing is to find some new tenants. Find anyone to take up the vacated space. From there on we'll see."
Representatives for Ashkenazy Acquisition Corp. did not immediately return calls Tuesday seeking comment.
This is the first time Eastland Center has missed a payment on the loan which originated in late 2006. However, the mall has been on the watch list since 2009.
"They had a lot of lease expirations going up," Barrie said. "That may have been the initial reason."
In late 2011, Sears announced the closure of its Eastland Center location. Macy's retail space at the mall has shrunk in recent months as the store occupies fewer floors.
At the end of 2014, the 1.4 million-square-foot mall had an occupancy rate of 76 percent, Barrie said.
"You want to see occupancy really hovering around 95 percent for any property," he said. "Malls included."
The mall has a cash flow of 69 cents on the dollar, Barrie said, which means that for every dollar borrowed, it is earning 69 cents to pay it back.
Carmen Hill, manager of the hair salon Custom Styles, said the missed loan payment raises some concerns. Her aunt has owned the salon at the mall for almost 17 years.
"We have been diligent about being here in the mall," Hill said. "We love being here. It's a great mall. We have a staff of over 40-odd people that would be concerned about their job. Who needs that type of pressure? That's kind of sad."
Eastland Center has had long been plagued with crime issues. During the last several years a number of incidents — including shootings and fights at the mall and near it — have left some shoppers on edge.
Hill said she did not want to comment on the mall's safety issues. She did say how she's noticed the mall tenancy has changed over the years with the loss of J.C. Penney and then Sears as anchor stores.
"Now we have more independent stores," she said.