LITHONIA — The Mall at Stonecrest has become the latest in metro Atlanta to face debt issues that may leave it vulnerable to foreclosure.
Fitch Ratings reports that a loan backed by part of the Lithonia mall is now held by a company that helps firms work out of debt trouble. The Atlanta Journal-Constitution reports the move will not affect mall operations. The shopping facility opened in 2001 and was seen as a boost to economy in south DeKalb County.
In its report, Fitch Ratings said the loan transferred to a special servicer had a balance of nearly $99 million and faced imminent default.
Stonecrest is owned by a joint venture that includes Forest City Enterprises in Cleveland, Ohio. Stonecrest's general manager, Patricia Elmore Edge, did not return calls seeking comment. Forest City said it would have a statement about the Stonecrest Mall on Monday.
Lithonia Mayor Deborah Jackson called the mall's problems "disturbing news."
The mall is the latest in Georgia to face financial trouble since the Great Recession. Since 2008, there have been more than 70 mall foreclosures nationally. In Georgia, the Gwinnett Place Mall went into foreclosure last year after its loan went to a workout firm. The loan on Southlake Mall in Morrow went to the same workout firm last year holding the Stonecrest loan. Fulton County's Union Station Mall was foreclosed in 2010 and is now empty. At least three other malls in Macon, Gainesville and Rome were foreclosed on in recent years but still operate.
The spaces in Stonecrest owned by major tenants such as Dillard's, Sears and JCPenney, are owned by the retail companies and are not part of the troubled loan.
While experts said financial distress rarely forces the closure of large malls, a turnaround may require changes in stores, new marketing or cost cutting. Analysts said the collapse in the local housing market cut growth in DeKalb and Rockdale counties, hurting the mall.
"It was built with the best intentions with the idea that it would do well," said Jim Bieri, a retail real estate expert with Stokas Bieri in Detroit. "But the economy didn't continue that way."