Simon, Prime Property Fund near $555M Dadeland Mall CMBS refinancing

Simon Property Group and Prime Property Fund are closing on a $555 million CMBS refinancing of Dadeland Mall in suburban Miami-Dade County, Commercial Observer reported, citing Fitch Ratings.

The loan refinances $345 million of existing debt and returns $199.8 million to the sponsors, while $5.7 million covers landlord obligations and $4.5 million covers closing costs. Wells Fargo, Bank of Montreal and J.P. Morgan Chase Bank are originating the 10-year fixed-rate, interest-only mortgage.

For advisors holding mall CMBS or retail-heavy private funds, the loan is a current benchmark for strong mall assets. It equals about 61% of Fitch's valuation and carries a debt yield of about 12% on trailing net operating income. Fitch values the 1.5 million-square-foot mall at $909 million using a 7% capitalization rate. Trailing net operating income was $66.4 million, up from $61.6 million a year earlier. In the broader sector, $8.7 billion of mall CMBS was in special servicing in October, as Private Real Estate Daily previously reported.

The center produced $892 million of sales in the 12 months through August. Apple, Macy's, Saks Fifth Avenue and Zara accounted for $389 million, or about 44% of the total, Commercial Observer reported. The owners have invested $82.5 million in renovations over the past decade, and the four-story center was nearly fully occupied in September.

Simon last year bought the 500,000-square-foot Brickell City Centre mall in Miami for $512 million and this year filed plans to expand its Boca Raton mall by redeveloping a nearby shuttered Sears. The Dadeland financing is expected to close Dec. 3.