Triple Five Closes $1.7B Loan for American Dream
- May 23, 2017
Triple Five Group of Cos. now has everything it needs to realize American Dream, a 3 million-square-foot retail and entertainment complex in East Rutherford, N.J. The developer recently closed a $1.7 billion private construction financing deal for the transformational project in the heart of metropolitan New York.
J.P. Morgan led the construction financing for American Dream, while Goldman Sachs led the tax-exempt bond offering. It’s big-ticket financing for a big-ticket project that, as American Dream President & CEO Don Ghermezian said in a prepared statement, will “establish the new standard, and redefine the retail and entertainment experience in the U.S. and across the world.”
American Dream will be erected at the Meadowlands Sports Complex on a site bounded by I-95, Route 3 and Route 120, the most traveled intersection in North America, Triple Five attests. The development, designed by GH+A Design Studios, will feature The Collections, a 460,000-square-foot luxury fashion area anchored by Saks Fifth Avenue and Lord & Taylor, and offering a total of approximately 450 retail and food options, including a 100,000-square-foot space for European fashion retailer Primark. Entertainment offerings will include the largest fully-enclosed indoor DreamWorks Water Park in North America; a 16-story Big Snow Indoor Ski & Snow Park; a 285-foot tall Observation Wheel; a 70,000-square-foot Sea Life Aquarium & Lego Discovery Center; an NHL-size ice rink; and an 18-hole miniature golf course. There will also be a 1,350-seat live-performance Cirque Du Soleil theater and luxury movie theatres by Cinemex.
It’s been a long road for the project now known as American Dream. The site was originally to have been developed as Meadowlands Xanadu by a joint venture of The Mills Corp. and Mack-Cali Realty Corp., which had been selected by the New Jersey Sports and Exposition Authority in 2003 to bring the project to life. The partners broke ground in 2005, with plans to open the retail and entertainment complex in late 2007. But financial issues ensued. Colony Capital recapitalized the project and took it over in 2007. A series of issues would follow: design controversy, the global financial crisis and the resulting Great Recession, legal troubles and more delays. Construction activity ceased in 2010, and a consortium of lenders took control of the project. In late 2010, Triple Five signed a letter of intent to complete the project. Construction resumed in 2013. A name change and design change followed.
“The construction loan paves the way for the completion of American Dream and allows us to aggressively move forward with the construction and opening of the project,” Ghermezian added. Triple Five expects to open American Dream in March 2019, adding another blockbuster to its portfolio, which includes Mall of America and West Edmonton Mall, the two largest entertainment, leisure and shopping destination properties in North America.
It’s unclear what the retail market in New Jersey will look like when American Dream opens in two years, given the sector’s current challenges, especially for shopping malls; however, for now, the market is on an upswing. Unemployment in New Jersey reached a 10-year low in February 2017, positive absorption in the retail market totaled approximately 300,000 square feet in the first quarter and the availability rate closed at 6.1 percent in the state and 2.9 percent in the Meadowlands submarket, according to a report by commercial real estate services firm Colliers International.
Image courtesy of GH+A Design Studios