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“Like Watching A Trainwreck”: NJ Meadowlands Mega-Mall Drowning In $3 Billion In Debt

Courtesy of ZeroHedge View original post here.

The monstrosity of a quintessential New Jersey landmark – the American Dream mall located at the Meadowlands – is in dire financial straits.

The megamall, which we have written about numerous times in the past, saw its opening delayed more than once and suffered from the extremely unfortunate timing of the pandemic. 

Now, owners the Ghermezian family are having trouble preventing the mall from "hemmoraging cash", according to Bloomberg.

In fact, the family has already hired advisors to help restructure the project's $3 billion in debt and also help operating the project. 

Lenders for the project, including J.P. Morgan, Goldman Sachs and Soros Fund Management, also stand to face losses on about $1.7 billion in construction loans if the mall's sorry financial condition doesn't turn around. 

The project is also carrying about $1.1 billion in municipal debt.

Neil Shapiro, a New York real estate attorney, said of the project: “It’s been like watching a train wreck that goes on forever. There aren’t a lot of projects that lose at least $3 billion that we’re still talking about as projects.”

While the mall is set to see luxury names like Tiffany & Co. and Hermes open shops on the premises in September, it may be a case of "too little, too late" for the project. The Ghermezian family has already hired adviser Houlihan Lokey Inc. and the law firm of Weil Gotshal & Manges to help them with restructuring. 

The mall did just $139 million in sales in the first two quarters of 2021, despite the post-Covid re-opening. It was previously predicted, in 2017, that the mall would do $2 billion top line in its first year. 

The Ghermezian family had already pledged equity in two other malls, the Mall of America and the West Edmonton Mall, as collateral for their stake in the American Dream mall. The company's $548 million equity stake in the American Dream mall may now be at risk. 

Anjee Solanki, director of retail sales for Colliers, thinks the family will get a chance to right the ship in a restructuring scenario, due to their expertise in running malls: “There’s going to be at least one shot at letting the Ghermezians work it out.”


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