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Centennial, USAA’s OC mall loan heads to special servicing again

Centennial Real Estate and USAA Real Estate’s $140.5 million loan on the MainPlace mall in Santa Ana has headed to special servicing for the second time in less than a year, The Real Deal has learned. 

The loan is “facing imminent maturity default,” according to Trepp, which cited comments from the special servicer on the debt. 

UBS and Bank of America provided the CMBS loan in 2012, when the Santa Ana mall was owned by Australia-based shopping center firm Westfield Group. Westfield then sold the mall to a partnership between Centennial, USAA and Montgomery Street Partners.

But the loan on the 1.1 million-square-foot mall went into special servicing in June, after the partners requested an extension, which was granted through December. 

In December, Centennial and USAA scored another six-month extension, loan documents show, giving the firm more time to pay it off. 

The loan has a fixed rate of 4.25 percent, according to Fitch Ratings, which downgraded its ratings on the loan earlier this month. That interest rate is lower than the effective federal funds rate on March 10, which came out to 4.57 percent. 

Centennial had planned to spend $500 million to redevelop the mall, adding a 309-unit apartment complex plus office space on the site. 

The renovation could “salvage performance” of the mall, where net cash flow has been “weak for several years,” DBRS Morningstar said in June. But the renovation has not yet finished. 

The anchors at the mall include Macy’s and JCPenney. Nordstorm vacated a big-box store at the site in March 2017, a space that has remained vacant since then. 

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