Some potentially good news for the Bangor Mall came from its owner Friday, when executives told securities analysts they want to keep malls with good cash flow rather than sell them.
David Simon, CEO of mall owner Simon Property Group, told analysts on a Friday conference call that he might sell some malls at the right price, but that he plans to keep those that can produce a high cash flow to fund investments. Positive cash flow shows a mall’s business is healthy and that stores are attracting enough customers that they can pay their bills and have money left over.
“We won’t do anything that is a fire sale,” said Simon, who did not give any specifics on plans for the Bangor Mall.
Simon did not give a number for the cash flow amount he expects, but an analyst said that Bangor Mall’s has been steady and positive.
The mall had $8.2 million in cash flow in 2016, up slightly from $8.1 million in 2007, when Simon took out a 10-year, $80-million loan using the mall as collateral, according to investment research company Morningstar analyst Edward Dittmer.
Simon on Oct. 1 defaulted on that loan, which went to a special servicer that is working with the company to either restructure it or potentially foreclose on or sell the mall.
That decision could take months, but Dittmer said the mall’s continuing cash flow is a positive sign for Simon to continue trying to restructure the loan. The mall is the largest north of Portland, a factor experts said also might help it survive.
“But the ball is entirely in Simon’s court,” Dittmer said.
The Indianapolis company said its third-quarter net income rose almost $50 million to $514 million over the same period last year. Simon owns more than 200 malls, including the Kittery Premium Outlets.
Meanwhile, there has been interest in the former Macy’s location, whose sale could boost the mall’s viability. An investor had the property under agreement, contingent on the realty agent, CBRE The Boulos Co., finding a retail occupant. But that deal fell through recently and the property is back on the market, Bangor-based broker Charles Day said. CBRE Partner Dan Greenstein in Portland said there has been interest from investors and owners who would occupy the retail space, but so far no takers.
J.C. Penney and Sears, whose leases are up within two years, both wouldn’t talk about future plans at the mall, but J.C. Penney spokesman Joey Thomas told the Bangor Daily News earlier that it currently has no plans to close the Bangor Mall location.