Westfield Stops Making Loan Payments on Massive San Francisco Mall
June 13th, 2023Via: Daily Mail:
San Francisco’s struggling downtown has been dealt another blow as Westfield has stopped making mortgage payments on its massive mall due to crime and tanking sales.
The firm has defaulted on the $558million loan and is handing it back to the lender, which will appoint a receiver. The mall will remain open for now.
The decision was sparked by the decision from Nordstrom, the mall’s anchor tenant, to close in August.
I don’t think a person needs to buy in on all Michael Hudson’s beliefs (fairly high regard for the Chinese system, Marxism etc.) to appreciate the many insights in this (quite long) interview transcript:
https://www.greanvillepost.com/2023/06/13/discussion-by-michael-hudson-with-kin-chi-lau-global-university-hong-kong-june-5-2023/
About a quarter of the way through he talks about the commercial property sector and how many of the corporate owners borrowed 100% on the original purchase and are able to walk away with minimal consequence. In that case, bank depositors and shareholders are on the hook.
In contrast, many private homeowners in the US are subject to recourse mortgages, where when property bubbles pop and borrowers lose their homes to foreclosure, banks can come after the previous owner’s other assets and future wages to cover the deficiency in current value vs the debt owed. Anybody familiar with the laws of other countries?
https://www.investopedia.com/ask/answers/08/nonrecourse-loan-vs-recourse-loan.asp
On a related note, US student debt is the only debt that is non-dischargeable during bankruptcy and most bankruptcy’s in the US are the result of unpayable medical bills—got the kids and the parents covered real good.
About three quarters through, he talks about how NGO’s and think tanks in the West are used to find and groom future leaders of the World who will eventually be elected, or installed after a coup, so as to gradually bring everybody under the tent. Very interesting.