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Simon’s Rushmore Mall loan sent to servicer, Fitch says

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A loan on a South Dakota shopping center owned by Simon Property Group Inc., the biggest U.S. real estate investment trust, was sent to a special servicer because default is imminent, Fitch Ratings said.

The balance of the debt on the Rushmore Mall in Rapid City is $94 million, Fitch said Tuesday. The 830,000-square-foot center was built in 1978 and renovated in 1993, data compiled by Bloomberg show.

The mall plunged in value after the 2008 financial crisis. It had an appraised value of $117.5 million in 2006 as the commercial property market was peaking and was appraised at $45 million in September 2011, according to Bloomberg data. Sears Holdings Corp. and J.C. Penney Co. are among the property’s anchor tenants, according to Simon’s website.

But Penny, which occupies 89,000 square feet, has threatened to leave the mall unless it receives a new 104,000-square-foot space at the mall. Simon has denied that request.

Simon’s revenue has been rising as demand for space in regional malls climbs. Revenue jumped 14 percent in the third quarter from a year earlier, the Indianapolis-based company reported.

Les Morris, a Simon spokesman, didn’t immediately return a voice mail or e-mail seeking comment on the Fitch listing.

Special servicers negotiate with landlords on behalf of bond investors. The Rushmore Mall loan is packaged within Banc of America Commercial Mortgage Inc. 2006-3, a commercial mortgage-backed security.

Simon owns or has stakes in 331 properties in North America and Asia.

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  1. John, unfortunately CTRWD wants to put the tank(s) right next to a nature preserve and at the southern entrance to Carmel off of Keystone. Not exactly the kind of message you want to send to residents and visitors (come see our tanks as you enter our city and we build stuff in nature preserves...

  2. 85 feet for an ambitious project? I could shoot ej*culate farther than that.

  3. I tried, can't take it anymore. Untill Katz is replaced I can't listen anymore.

  4. Perhaps, but they've had a very active program to reduce rainwater/sump pump inflows for a number of years. But you are correct that controlling these peak flows will require spending more money - surge tanks, lines or removing storm water inflow at the source.

  5. All sewage goes to the Carmel treatment plant on the White River at 96th St. Rainfall should not affect sewage flows, but somehow it does - and the increased rate is more than the plant can handle a few times each year. One big source is typically homeowners who have their sump pumps connect into the sanitary sewer line rather than to the storm sewer line or yard. So we (Carmel and Clay Twp) need someway to hold the excess flow for a few days until the plant can process this material. Carmel wants the surge tank located at the treatment plant but than means an expensive underground line has to be installed through residential areas while CTRWD wants the surge tank located further 'upstream' from the treatment plant which costs less. Either solution works from an environmental control perspective. The less expensive solution means some people would likely have an unsightly tank near them. Carmel wants the more expensive solution - surprise!

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