Centennial Real Estate Management has replaced longtime management company Brookfield Properties as manager of the Providence Place Mall. (Michael Salerno/Rhode Island Current)
The Chicago-based company managing the Providence Place mall has been ousted as part of a court-approved receivership process aimed at shoring up the downtown shopping destination’s finances.
The management swap, first reported by Providence Business News, was also confirmed by Mark Russo, a court-appointed temporary receiver, in an email to Rhode Island Current Tuesday. As of Nov. 15, Centennial Real Estate Management LLC has replaced Brookfield Properties, Russo said.
“While Providence Place will always be an integral part of Providence, it will no longer be part of the Brookfield Properties’ portfolio,” Lindsay Kahn, a spokesperson for Brookfield, said in an email Tuesday afternoon. “We are proud of the role we’ve had in the shopping center over the past 20 years and will continue to support Centennial through this transition.”
Brookfield has owned the mall since 2018, when it acquired prior mall owner GGP Inc. Even before the acquisition, the property management company acted as the mall manager on behalf of GGP.
Centennial, a Texas-based real estate company which lists several other malls in its online portfolio, declined to comment on its new management duties. The company has retained, existing, on-site managers of the mall as part of the transition, Russo said.
Bringing in Centennial was part of the multistep receivership process laid out by private lenders who alleged Brookfield Properties owes them $259 million in principal and interest from a loan taken out in 2011. The $305 million loan is backed by 980,000 square feet of mall space. The mall has a total of 1.3 million square feet; some of the anchor sites such as Macy’s were excluded from the collateral.
Brookfield first defaulted on its mortgage loan in May 2021 but staved off serious legal action for several years through a series of extensions on the maturity date, which ended May 6, 2024.
The receivership, the state equivalent of bankruptcy, granted by Rhode Island Superior Court Judge Brian Stern on Oct. 31 puts a pair of temporary receivers — Russo, and his law partner, John Dorsey — in charge, at least until a Dec. 4 court hearing. Stern’s order also gave Russo and Dorney power to borrow up to $500,000 to keep the mall afloat while figuring out next steps — either reviving the mall under new management, or selling it.
Court documents show a $500,000 bond note was executed on Nov. 13.
Russo previously said that the temporary receivership would not change day-to-day mall operations for tenants or shoppers. However, the Macy’s anchor store in Providence has since been listed for sale, as first reported by The Boston Globe Rhode Island. The founding anchor tenant’s future in the mall was already in question, with Macy’s executives signaling earlier this year that 150 stores nationwide would be closing in the next three years.
A Macy’s spokesperson, who did not share their name, said in an email Tuesday that the company has not made a decision on which locations will close, noting that Macy’s has a long-term lease at Providence Place Mall.
The spokesperson did not respond to questions about the reported sale listing, details of which are not publicly listed.
Russo also did not return questions about the tenant’s place within the mall.
The mall opened after a series of delays in 1999. Once considered the crown jewel of downtown, it was a destination for shoppers and high-end retail tenants alike.
When the mortgage loan was secured in 2011, the mall and attached parking garage were valued at $558 million, according to rating agency KBRA.
The loss of founding anchor stores like Nordstrom, which left in 2019, along with changes in shopping patterns and preferences post-pandemic, have been blamed for the mall’s recent financial struggles.
As of May 2021, the appraised value had plummeted to $240 million, and as of June, KBRA downgraded all of the six classes it rates for the mall’s commercial mortgage-backed security, warning of heightened credit risk amid the already past-due loan.
A hearing on a permanent receivership plan is scheduled for Providence County Superior Court on Dec. 4.
GET THE MORNING HEADLINES.