Home Commercial Brookfield Defaults on $77MM Loan for Bellis Fair Mall

Brookfield Defaults on $77MM Loan for Bellis Fair Mall

Brookfield, Bellis Fair Mall, CMBS, DBRS Morningstar, Bellingham
Courtesy of Brookfield

By Meghan Hall

Major developer and investor Brookfield Properties Trust has defaulted on its loan for one of its assets in Bellingham, Wash. According to a report by DBRS Morningstar, the firm failed to repay its $77 million loan for the Bellis Mall, and the loan’s rating was subsequently downgraded.

The property is located at 1 Bellis Fair Parkway and was originally built in 1988. In all, the property totals 775,160 square feet and includes 108 retailers. The mall was recently renovated in 2015. Five major anchors call the property home: Dick’s Sporting Goods, JCPenney, Kohl’s, Macy’s and Target.

“Bellis Fair is an ideal shopping destination for families, college students and tourists in the Bellingham area, located directly on Interstate 5, just 20 miles south of the Canada/United States border and 90 minutes north of Seattle,” Brookfield states of the property on its website. “Home to Western Washington University, the Alaska Ferry, Mount Baker and the Salish Sea, this unique area is filled with magnificent scenery, a culture of outdoor recreation, local food, spirits, art and music.”

Brookfield acquired the property in 2018, and also acquired the loan with the asset at the time of the deal, according to DBRS Morningstar. The loan was expected to mature on February 6, 2022 but has not been repaid. 

DBRS Morningstar notes that since Brookfield’s acquisition, the loan’s performance has declined with a “near breakeven debt service coverage ratio.” The report stipulates that the decline was the result of decreases in base rental income.

However, DBRS stipulates that the current pandemic could have played a role. The report notes that “the collateral is just south of the Canadian border and sales have been historically dependent on traffic from Canadian consumers, which was severely limited for most of 2020 and 2021 because of the Coronavirus Disease (COVID-19) restrictions.”

Brookfield has faced default on other loans in recent months. In November of 2021, the firm was facing “imminent default” on a downtown Chicago office tower. In August of 2020, the company was struggling to stay current on its CMBS debt for Tysons Galleria in Virginia, which is one of the largest malls in the Washington metropolitan area. 

The company’s portfolio expands far beyond retail. Currently, Brookfield has $690 billion assets under management. Its reach also spans 30 countries and five continents, according to the company’s website.

As of this writing, Brookfield had not yet returned The Registry’s request for comment.