Morgan Stanley plans to securitize the senior portion of a $310 million commercial mortgage that it underwrote for Simon Property Group, according to Standard & Poor’s

A $220 million portion of the loan will be securitized via Morgan Stanley Capital I trust 2016-PSQ. The loan is secured by Penn Square Mall, a 1.06 million square foot super regional shopping mall located in Oklahoma City. Simon used the loan in part to refinance $93.2 million of existing debt; the remaining proceeds of approximately $215.7 million (69.6% of the whole loan balance) were cashed out.

Even after the cash-out refi, Simon Property still has approximately $350 million of equity in the property, which it has owned since 2002, according to S&P.

The malls overall occupancy rate was approximately 99.0% as of December 2015 and has averaged 99.0% for the past 10 years, ranging from 96% in 2010 to 100% in 2009.

However S&P said that leases representing 77.4% of the gross leasable area expires before the loan is repaid, and leases representing 32.3% of gross leasable area expiring in 2017.

Simon pays only interest on the loan during its entire 10-year term. This means it will not amortize and could prove challening to refinance at the end of terms.

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