12/16/2011

Calpers Team Seeks $400 Million Mall Loan

A Calpers partnership is trying to line up about $400 million of financing on Woodfield Shopping Center, a high-end mall in the Chicago suburb of Schaumburg.

Calpers and its partner, General Motors Pension Trust, would use the proceeds to retire roughly $265 million of debt that matures in April.

Woodfield is billed as a “fortress mall,” a label applied to top-tier retail properties with the strongest sales. Market pros estimate that it is worth more than $650 million. The 2.2 million-square-foot center produced $45.3 million of net operating income last year. In-line sales are about $525/sf.

Calpers and GM Pension each own a 50% stake in the mall, which is managed by Taubman Centers of Bloomfield Hills, Mich. The pension funds obtained a $300 million mortgage in 2002 from Morgan Stanley. Amortization has reduced the balance by about $35 million.

Morgan Stanley securitized the $257 million senior portion of its loan via three pooled offerings (Morgan Stanley Dean Witter Capital Trust, 2002-HQ, 2002-IQ2 and 2002-TOP7).

Woodfield was the largest U.S. mall when it opened in 1971 in an area that had previously been farmland. It has five department-store anchors: Nordstrom, Lord & Taylor, Macy’s, JC Penney and Sears. Slightly less than half the total space — 900,000 sf — is leased to in-line tenants. The mall is near three major roadways — Route 53 and Interstates 90 and 290 — and about 25 miles from downtown Chicago.

The property was built by Taubman Centers’ founder, Alfred Taubman, and Sears unit Homart Development — two big players in the early days of the mall industry. It was named after former Sears chairman Robert Wood and department-store magnate Marshall Field.

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