Simon Property Group Faces Challenges at Struggling Square One Mall in Suburban Boston
Simon Property Group is nearing the end of its ownership for Square One Mall, a struggling property located in Saugus, Massachusetts. The $76 million CMBS loan tied to part of the mall has been transferred to special servicing ahead of its January maturity and faces significant refinancing challenges due to declining net cash flow since 2022. As of March 31, this portion was only 74% occupied and classified as a Class-C mall. Square One Mall is one of several underperforming properties Simon has listed in the 'Other Properties' category within its earnings reports—often indicating eventual return to lenders or sale. The mall's Sears department store closed during the pandemic, reducing anchor tenant presence. Despite these challenges, Simon continues to invest and redevelop better-performing malls like Copley Place and Northshore Mall. The broader mall sector has shown signs of recovery with increased consumer spending and experiential retail concepts driving value growth. Mall values rose 13% over the last year—the highest among commercial real estate sectors—while Simon's stock gained nearly 20%, outperforming the S&P 500.
Tickers: $SPG
Topics: CMBS loan mall sector Simon Property Group Square One Mall