The Macerich Co. has closed on a $540 million refinancing loan for the 1.1 million-square-foot Kings Plaza shopping center in Brooklyn, N.Y. The new loan bears a fixed interest rate of 3.62 percent and matures on Jan. 1, 2030.
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The previous loan for $427.4 million was repaid at closing. Excess refinancing proceeds were used to repay a portion of the Santa Monica, Calif.–based REIT’s revolving line of credit. After buying the 1970-vintage mall from Vornado around late 2012 and renovating it in 2014, Macerich in 2018 invested $110 million to redevelop the former four-level Sears store and renovate the mall’s exterior along Flatbush Avenue. Primark, Zara, JCPenney and Burlington wound up occupying the former Sears space; other anchors include Old Navy, Best Buy, Lowe’s and Macy’s.
The property generated $735 per square foot as of the end of the third quarter, according Macerich. Nationwide, Macerich owns 51 million square feet of real estate consisting primarily of interests in 47 regional shopping centers.
A spotty picture
While progressing Brooklyn neighborhoods are seeing new residential and other developments that generate foot traffic for retailers, other parts of the borough are not as fortunate, according to a summer 2019 report from The Real Estate Board of New York. As of mid-year, average asking rents for ground-floor retail space decreased in 12 of 17 Brooklyn corridors, the report stated.
Even given its location off the borough’s major retail corridors, Kings Plaza, with the investment of substantial sums and appropriate tenant reconfigurations, seems to be heading in a good direction.
Across the country, in metro Los Angeles, Macerich is working a different solution to the woes of brick-and-mortar retail. Macerich and Hudson Pacific Properties, with Gensler handling design, are redeveloping the former Westside Pavilion mall into a 584,000-square-foot office campus called One Westside. In January, Google signed a 14-year lease for all of that space.