Wheaton's Westfield Mall faces uncertain future
Wheaton's Westfield Mall faces uncertain future
One of the largest malls in Maryland is facing an uncertain future right now. The company that owns Westfield Mall in Wheaton just defaulted on a loan worth hundreds of millions of dollars.
WHEATON, Md. - One of the largest malls in Maryland is facing an uncertain future right now.
What we know:
The company that owns Westfield Mall in Wheaton just defaulted on a loan worth hundreds of millions of dollars.
It's a first step that means Westfield could be using it as a negotiating tactic, or, the company wants to get rid of the mall altogether. And it's not surprising, traditional malls have been struggling for years.
"It is tough on the community but at the same time it presents this opportunity for redevelopment," said John Carroll, Head of Advisory with Coresight Research. "That's the other big trend coming along here. If this isn't the mall the way it used to be, with shops I don't care to go into, then what can it turn into?"
The backstory:
Westfield just defaulted on a $235 million loan tied to Westfield Wheaton — the biggest mall in suburban Maryland and the fourth-largest in the greater Washington area.
The mall was originally built back in 1958, known as Wheaton Plaza, and it was the first shopping mall in Montgomery County.
Westfield told FOX 5 in a statement that it’s "one of the group's few remaining regional malls, the debt has matured, and we are engaged in discussions with the lender as we explore all options."
That doesn't mean that it's closing down — that would be a last step. But it could mean they reach a new deal or come under new ownership.
What's next:
The mall is at 90% occupancy with a Costco, Target, Dick's Sporting Goods. But even with it mostly full, it's likely that the rents aren't covering the costs of the loan and not turning a profit.
"It might not go away. I want to be clear, lots of times these types of companies will threaten to go out so they can renegotiate the terms of their debt," Carroll said.
"Malls have been trying to redefine themselves in terms of what they can offer that's unique," said Amna Kirmani with the University of Maryland Smith School of Business.
One thing that experts say is that what they're seeing in malls that are still successful is featuring more entertainment spaces rather than shopping.