American Dream Losses Ballooned to $245M in 2022

Triple Five Group’s American Dream mall lost $60 million in its first full year of operation. The New Jersey megacomplex has since more than doubled down on its troubles, reporting it quadrupled losses over the span of one year.

The Ghermezian family’s East Rutherford complex lost $245 million in 2022, according to a draft securities filing posted to Municipal Securities Rulemaking Board’s EMMA website and reported by Bloomberg.

Expenses at the 3.5 million-square-foot property almost doubled, reaching $428 million last year. Financial expenses, which often includes debt service payments, hit $189 million.

Triple Five’s debt woes at the property stretch back years. The landlord initially hoped to bring in 40 million annual visitors to the complex, only to see its hopes immediately dashed by a pandemic that paused in-person activities and shopping.

Since then, the problems at the American Dream have been persistent and the landlord has struggled to make payments on various financing packages attached to the complex.

In April, a judge ruled in favor of a pair of lenders after Triple Five failed to contest a lawsuit, forcing the landlord to pay the lenders $390 million after a May 2021 default. Bondholders and surrounding towns apply constant pressure on the Ghermezians to pay money owed under development agreements.

Firms holding the American Dream’s debt are looking for the off-ramp. Barry Sternlicht’s Starwood Property Trust is weighing a sale of its $230 million loan at a discounted rate, hoping to get at least 70 cents on the dollar. The loan is part of a $1.7 billion package that financed construction; Triple Five received a four-year extension on the debt last year.

Occupancy at the mall did increase from 2021 to 2022, jumping from 77 percent leased at the end of 2021 to 83 percent at the end of the year, before rising even higher to 85 percent. Additionally, liabilities fell 11 percent to $2.3 billion, though its $380 million in total equity was down 24 percent year-over-year.

— Holden Walter-Warner