A MALL with 35 years of history is expected to close soon.
The prominent shopping center has updated itself and added several stores to its repertoire since it was built in 1989.
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Philadelphia Mills — formerly Franklin Mills Mall until the change of ownership to Simon Property Group in 2007 — is home to Walmart, Marshalls, Dave & Busters, H&M and even an AMC Theater.
Its anchor store is in Burlington and has quickly become a shopping staple for Northeast Philadelphia residents, but has faced some financial difficulties in recent years.
Philadelphia Mills’ net operating profit plummeted in 2023 to the lowest numbers since Simon Property Group took ownership, the Philadelphia Business Journal reported.
Simon Property Group is now discussing the possibility of transferring ownership to Business Mortgage-Backed Securities (CMBS), which holds the $290 million loan it has on the mall.
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It recorded revenue of $19.5 million, a 15% drop from 2022 earnings of $23 million, according to CMBS data.
Therefore, Philadelphia Mills raised just $10.6 million in 2023, which barely covered the $9.7 million it owed CMBS for loan payments.
In total, Simon Property Group still owes about $258.5 million on the mall, according to CMBS reports.
The loan servicer’s notes also show that Simon Property Group is working on a title transfer to Philadelphia Mills.
It’s unclear if or when this will be finalized.
Simon Property Group previously declined to comment on the possibility of losing ownership of the mall when contacted by the Philadelphia Business Journal.
Philadelphia Mills was 76% leased at the end of 2023, down from 96% in 2007 when Simon Property Group took over.
Several stores have renewed their leases for this year, including American Eagle Outfitters, Zales Diamond Store Outlet and more.
While the future remains uncertain for Philadelphia Mills, several buyers have made statements about the current state of the center itself.
Simon Property Group
Simon Property Group is a real estate investment trust that predominantly invests in shopping malls and stores across the country.
- Simon Property Group began in 1960.
- Its current CEO is David Simon.
- It has more than 190 shopping malls in 38 states.
- Florida has the largest number, with 22 locations.
- Simon Property Group co-owns JCPenney with Brookfield Properties.
WHAT HAPPENED?
Influencer and client Chaz George (@chazgeorgebatmanhotline7069) took viewers to the mall in May in a video on Youtube.
Stores like Bath & Body Works, GAP and others could be seen inside, but some were closed and the aisles were relatively empty.
Customers in the comments were shocked.
Some have called Philadelphia Mills a “shadow of its former self.”
“The mall was booming in the 90s and 2000s,” commented another.
“Sad to see its current state,” added a third.
Other shopping malls have also been affected across the country.
A retail expert says the United States may be seeing the “death of malls” as we know them, after a center in Michigan closed for good earlier this year.
The Fulton Center in New York City also detailed plans to close in March after just 10 years in business.
This story originally appeared on The-sun.com read the full story
