“Given the decline in cash flow, downgrades of one or more categories are likely,” Fitch said.

Sales at Stony Point’s small tenant stores, which exclude its two mainstay major stores, fell 11.2% in September to $ 379 per square foot, from $ 427 per square foot in September 2018, Fitch said.

The drop in online tenant sales at the other two malls was not as dramatic as the drop at Stony Point, according to the report. Sales per square foot at Willow Bend stores fell to $ 358 in September, from $ 382 last month, while sales per square foot in downtown Fairlane fell to $ 457 in September, from $ 470 there a year ago. in September.

A subsidiary of private equity firm Starwood Capital Group acquired Stony Point and six other shopping centers, including the MacArthur Center in downtown Norfolk, for $ 1.403 billion in October 2014 from Taubman Centers Inc, based in Michigan.

Starwood took out two loans to pay off part of the deal. A loan portfolio used three shopping centers as collateral: Stony Point, The Shops at Willow Bend and Fairlane Town Center.

Trepp LLC, a New York-based data and research provider for the commercial real estate market, reported in January that the loan secured by the three malls was past due. At the time, a special duty agent initiated a 60-day forbearance – or hold period – as he attempted to work with Starwood on options. But those proposed loan changes did not go as planned last week, Fitch said in his report.