Westfield malls in Citrus Park, Clearwater headed back to the bank after nine-figure defaults
By Ashley Gurbal Kritzer
Tampa Bay Business Journal
Published: Dec 31, 2020

Two of Tampa Bay's biggest suburban shopping malls are going back to the bank.

A spokesman for Uniball-Rodamco-Westfield, the owner of Westfield malls in Citrus Park, Countryside and Brandon, confirmed to the Tampa Bay Business Journal that the properties in Citrus Park and Countryside would be transitioned to new ownership. Foreclosure lawsuits were filed this week against URW for defaulting on loans for those two properties.

Westfield Brandon is not affected, the spokesman said, and is still owned by URW.

"Due to the continuing impact of the Covid pandemic, Westfield is working with the special servicer in regard to the foreclosure of Countryside and Citrus Park and, given the circumstances, believe this is the best outcome with regard to these two assets," a URW spokesman said in a statement. "We are committed to ensuring a smooth transition to new ownership, with both centers remaining open and operating throughout the process to serve the community."

When a lender forecloses on a large commercial property like an enclosed mall, the real estate is typically sold at foreclosure auction.

URW defaulted on two commercial mortgage-backed security loans, according to foreclosure lawsuits filed in Pinellas and Hillsborough circuit courts.

URW defaulted on loans for both malls in May, according to court documents. Deutsche Bank filed the lawsuit acting in its capacity as a special servicer to the loan for the Countryside mall; the Citrus Park loan is serviced by Wells Fargo. Both loans were issued from Morgan Stanley Mortgage Capital Holdings LLC, according to the lawsuits.

The unpaid principal on the Countryside property is nearly $150 million, according to the lawsuit. It's not known whether Westfield Brandon, which is owned by the same group, is in default. Tampa entrepreneur Roberto Torres, who recently opened a Blind Tiger cafe in Westfield Brandon, told the Tampa Bay Business Journal in November that Westfield Brandon is an "outlier" for malls and URW, with throngs of shoppers still regularly flocking to the property.

Carlton Fields, the law firm representing both special servicers, declined to comment. URW did not immediately respond to a request for comment Thursday.

The loan defaults come in the wake of the novel coronavirus pandemic. In Florida, nonessential retail, including indoor shopping malls, was shuttered by state order for the month of April.

But most enclosed malls were struggling long before the pandemic began. Those properties were facing heavy competition from online retailers and behemoths like Amazon.com.

Still, Westfield Countryside had a weapon in the battle against e-commerce: In 2014, Whole Foods Market Inc. opened in a portion of the mall's former Sears box. Grocers have long been heralded as a savior of retail real estate, regularly drawing foot traffic to properties as consumers still preferred to make food purchases in-store as opposed to online. But the pandemic has started to shift that dynamic, too, with online grocery orders and curbside pickup services skyrocketing in 2020.

The Countryside mall is also home to a CMX Cinemas location. Movie theaters had become secondary mall anchors in the years leading up to the pandemic, but like brick-and-mortar retail and indoor dining, theater chains have faced unprecedented challenges as consumers shy away from enclosed public spaces.