Dolphin Mall in Miami Scores $1 Billion Loan – Commercial Observer
Mall owner Taubman has secured a $1 billion loan collateralized by Dolphin Mall Miami in Sweetwater, Fla., this week, Commercial Observer has learned.
The 1.4 million-square-foot super-regional mall is one of the highest-volume shopping centers in the United States, and surpassed pre-pandemic income in 2021, according to CMBS loan documents. Net income averaged more than $90 million annually in the three years preceding the pandemic, but declined to less than $70 million in 2020. However, income bounced back to $93 million in 2021 as travel restrictions eased and businesses reopened, per documents from DBRS Morningstar.
The two-year, interest-only floating-rate loan was issued at a 2.6 percent interest rate. The loan was issued by Wells Fargo and JPMorgan Chase and has three 1-year extensions. Loan proceeds will be used to pay existing debt and cover closing costs. Taubman declined to comment on the transaction.
The mall was appraised in January at $1.67 billion, or $1,166 per square foot, which equates to a 59.7 percent loan-to-value ratio. However, an appraisal report from Cushman & Wakefield projected the mall value would improve to a stabilized market value of $1.7 billion by Jan. 1, 2023, due to the opening of the planned Live At Dolphin Mall.
Taubman and Cordish announced plans last December to build Live at Dolphin Mall at a cost of $20 million, with Taubman contributing $3.5 million and the balance from Cordish. It will renovate 32,000 square feet of exterior-facing restaurants and add a 30,000-square-foot outdoor plaza as a gathering space for live music, sports viewing, festivals and community events. It will be anchored by a Sports & Social restaurant.
The mall was completed in 2001 and has more than 240 stores and restaurants. It is Miami’s largest outlet center with a roster of national brands, restaurants and big-box retailers such as Bass Pro Shops Outdoor World, Saks Off Fifth, Forever 21, Ross Dress for Less, Bowlero and Cobb Theatres.
Comparable in-line sales fell from $915 per square foot in 2019 to $516 per square foot in 2020, but bounced back to $847 per square foot in 2021.
Occupancy at the mall averaged 96.2 percent between 2017 and 2021, never falling below 92 percent despite pandemic-related store closures. Miami has the lowest retail vacancy rate across 81 markets tracked nationally at 3.4 percent as of the first quarter, according to Cushman & Wakefield’s U.S. National Shopping Center Markets report. That’s compared with an overall 6.3 percent vacancy rate for retail properties nationally.
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