Independence Center is scheduled for a Feb. 16 foreclosure sale as its owner, Simon Property Group, faces default on its $200 million loan for the property, according to information in a report by Trepp, a firm that researches commercial mortgage-backed securities.
The 1 million-square-foot enclosed mall at 18801 E. 39th St., which opened in 1974, showed signs of distress a year ago when Simon Property Group had signaled that it might not be able to pay the $200 million loan tied to the mall property. The loan was transferred to a special servicer — a firm that handles distressed loans — on May 21.
The size of the $200 million loan and increased competition for retail in and around Independence were cited as reasons for Simon Property Group’s difficulty with Independence Center.
A spokesman for Simon Property Group did not return calls seeking comment. Executives with the firm did not discuss Independence Center during its quarterly earnings call with investors on Jan. 31.
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Simon Property Group, a publicly traded real estate investment trust based based in Indianapolis, Ind., no longer lists Independence Center on its website portfolio of properties.
Trepp’s report, which relayed information from Independence Center’s special servicer, indicated that “there is a significant and/or imminent risk of a maturity default of the loan” and advertisements of a Feb. 16 trustee sale had been circulated. A sale to an interested buyer ahead of Feb. 16 could forestall a foreclosure sale.
Tom Lesnak, president and chief executive of the Independence Economic Development Council, said rumors of a sale have floated but nothing definitive has been discussed.
“We have been hearing rumblings that somebody was out there to acquire it,” Lesnak said. “Honestly, Independence Center and Simon Property Group have been completely silent on everything so far.”
Jackson County property records reveal no indication of a sale from Simon Property Group.
Lesnak said that Simon Property Group has invested and maintained the mall property and added an H&M clothing store last year.
Independence Center’s troubles mirror the fortunes of enclosed malls nationally and locally. News of the potential foreclosure sale in Independence comes after Oak Park Mall in Overland Park learned last week that one of its main anchors, Nordstrom, would depart for the Country Club Plaza in 2021.
Independence Center and Oak Park Mall are two local survivors of a broader retail trend of the last 15 years that has not favored enclosed malls, the darlings of suburban retail development during the 1970s and 1980s.
Shuttered malls in the metro have often been long-term headaches for the cities where they occur. The Unified Government of Wyandotte County/Kansas City, Kan., is still trying to figure out what to do with the former Indian Springs mall site. The Bannister Mall site in southeast Kansas City languished in dormancy for years before it was converted into a new office campus for Cerner.