The
debt problems with The Mall at Partridge Creek in Clinton Township and Fairlane Town Center in Dearborn are putting the fate of both properties up in the air.
Neither mall — which are about as disparate as they come in terms of age [[about 15 years vs. 45), design [[outdoor vs. indoor) and location [[far-flung suburbs vs. inner-ring suburbs) — has a particularly bright short-term future.
With nearly $900 million in commercial mortgage-backed securities backed by those malls and five others on Miami Beach, Fla.-based owner Starwood Capital Partners' books, the properties are laden with debt and spiraling toward the same fate that has met so many other regional malls in the last 10-15 years: new ownership after financial turmoil.
As one local expert said bluntly in an email to me last week: "They are both equally in the shit can. Both of those properties have outlived their useful life. They are functionally obsolete and will never, ever be turned around. That's just my opinion," said Christopher Brochert, co-owner of Bloomfield Hills-based Lormax-Stern Development Co., which owns shopping centers and malls in Metro Detroit and elsewhere.
Fairlane Town Center has been in receivership since at least May and, along with two other Starwood-owned malls in Virginia and Texas, faces liquidation, according to CMBS loan commentary from New York City-based Trepp LLC, which tracks that kind of data.
Dark clouds
It's not just your standard-fare suburban shopping malls that are feeling the squeeze right now.
Even the so-called Class A malls — think, for example, Somerset Collection in Troy and Twelve Oaks Mall in Novi — have dark clouds over them, according to a new report this week from Newport Beach, Calif.-based Green Street, a firm that analyzes real estate trends.
Overall, the nation's luxury malls — long considered relatively safe considering the upheaval in the retail sector the last decade or more with the rise of e-commerce — have plunged about 45 percent since the peak in 2016