Denver Pavilions “in a tenuous situation” with loan coming due
The Denver Pavilions mall is facing financial uncertainty as its loan deadline approaches later this year, according to its owner.
Gart Properties CEO Mark Sidell revealed to BusinessDen that the firm is currently in discussions with the lender regarding the property, but no concrete plan has been established.
Sidell pointed out that this predicament is not unique to Denver Pavilions, as many downtown properties, especially office buildings, are also facing challenges.
“Most are in a precarious situation,” he stated. “Denver Pavilions is no different.”
When questioned about the possibility of foreclosure or a deed-in-lieu of foreclosure, Sidell did not dismiss the idea, stating, “I’m not ruling out those options. They are potential outcomes.”
The $85 million loan for the property is due in July, and Sidell did not comment on whether Gart Properties has been meeting monthly payments.
While the struggles of downtown office landlords are well-documented, Sidell’s remarks shed light on the difficulties faced by owners of non-office assets.
Denver Pavilions, a prominent fixture in Upper Downtown, spans two city blocks and is located in an area with higher vacancy rates and older office buildings.
The mall, which opened in 1998, was acquired by Gart Properties in 2008 for $94 million in partnership with ING Clarion Partners. In June 2015, Clarion sold its share to MetLife Real Estate Investors. The $85 million loan from Massachusetts Mutual Life Insurance Co. was secured at the same time.
CoStar data indicates that Denver Pavilions is 73% leased, although a walk through the mall suggests a lower occupancy rate. Current tenants include H&M, Lucky Strike bowling alley, and Regal Cinemas. Recent departures include Sephora, Hard Rock Cafe, Banana Republic, and Journeys.
The ongoing construction on the adjacent 16th Street Mall has also impacted Denver Pavilions, as it has for other businesses in the area.
Glenarm Place, which runs under the mall, is one of two streets that remain closed due to the pandemic, along with Larimer Square. Sidell expressed hope that this area would become the heart of Upper Downtown.
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