A New York-based real estate lending company says it plans to foreclose on the Lloyd Center mall and redevelop the Northeast Portland shopping center.
KKR Real Estate Finance Trust said it plans to take ownership of the 1.2 million square foot mall before the end of the year. The company says payments on its $110 million debt has been overdue since October 2020.
“Upon taking title, which is targeted for the fourth quarter, we’ll begin to plan for a comprehensive redevelopment of the site, which we expect will include multiple uses including residential and creative offices,” said Patrick Mattson, the president and chief operating officer of the company.
Bloomberg Law first reported the foreclosure.
KKR had loaned $177 million toward the Lloyd Center’s renovation in 2015.
Lauren Garetto, a spokesperson for the mall, said Lloyd Center would not be commenting on the possible foreclosure. The mall’s manager, Cypress Equities of Dallas, Texas, could not immediately be reached.
Lloyd Center opened in 1960 as a 100-store, open-air mall, said at the time to be the largest in the world. It was covered in the 1980s with a glass ceiling, then extensively renovated in the 1990s into a more traditional enclosed shopping mall with a central food court.
The mall launched another ambitious renovation in 2014, spending tens of millions to refresh the mall’s interior. It also revamped the centerpiece ice rink, shrinking its footprint by nearly a quarter, to the chagrin of regular skaters.
The mall has nonetheless struggled to turn things around. Major tenants left — including Nordstrom in 2015, Sears and Marshalls in 2018 and Macy’s earlier this year — and shopping traffic continued to decline. Plans to pivot to an entertainment district, complete with a bowling alley and concert venue, never materialized.
The COVID-19 pandemic only worsened the center’s problems. And in August, the mall closed for more than three weeks after an electrical fire.
A February letter addressed to the community from Todd Minnis, the CEO of Lloyd Center owner EB Arrow, said his company was committed to keeping Lloyd Center “an integral part of the Portland community” for the long term.
“Throughout its 60-year history, Lloyd Center has a legacy of adapting to meet the needs of a changing community,” Minnis wrote. “Rest assured, it will remain an important pillar of this community.”
EB Arrow could not be reached for comment.
-- Jayati Ramakrishnan
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