Creditors Foreclose On Montgomery Mall, $118M Owed: Reports

MONTGOMERY TOWNSHIP, PA — Creditors have foreclosed upon Montgomery Mall after its previous owner, Simon Property Group, failed to make interest payments for months, according to multiple media reports and court documents.

A default notice was issued last month on the $100 million loan that Simon took out for the mall, the Philadelphia Business Journal first reported.

Now, Simon owes nearly $119 million to creditors for the loan, coupled with interest payments, according to reports.

The future of the Montgomery Mall property, now in the hands of creditors, remains unclear.

Simon has not issued any public comment on the foreclosure. Patch has reached out to the group for a statement.

Like other major malls around the country, Simon's malls — which include King of Prussia Mall — have faced challenges due to the rise in online shopping. This was compounded during the pandemic, as health-mandated shutdowns led to closures for weeks, and reduced customer bases for months. Speculation has run rampant that the pandemic could have marked an irrevocable turning point for brick and mortar shopping.

Simon's original $100 million loan, from the Royal Bank of Scotland was disbursed in 2014, and since that time, the value of the property has plummeted. It was worth just $61 million in 2020, according to financial analysis site Wolf Street, down from $195 million at the time of the loan. The Philadelphia Business Journal notes that due to the departure of some major tenants over the past several years, roughly 170,000 square feet of the property are currently vacant.

Simon is not the only local mall ownership group suffering. The Pennsylvania Real Estate Investment Trust (PREIT), owner of the Plymouth Meeting Mall and Willow Grove Park, declared bankruptcy last fall.