Commercial-Property Foreclosures Are Poised to Rise as Covid-19 Lingers

The coronavirus pandemic came at a bad time for the Burnsville Center mall near Minneapolis. In May,

Macy’s Inc.

said it would close its store. J.C. Penney Co., which also has a store at the mall, filed for bankruptcy.

Owner

CBL & Associates Properties Inc.

risked losing the mall if it stopped making payments on the $63 million mortgage. Instead, the company overseeing

CBL’s

securitized mortgage agreed to defer payments for three months, according to the loan servicer’s commentary collected by data firm Trepp LLC.

But CBL didn’t pay off the loan after three months. Now, Burnsville Center is one of hundreds of properties across the country heading to foreclosure.

CBL didn’t respond to requests for comment.

Lenders, for the most part, were initially happy to grant debt forbearance and hope that the pandemic would end soon. But many now expect the pandemic and its aftereffects to linger for

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