Real Estate

Owners of Baltimore's Harborplace may be in danger of default on loan

The New York-based company that owns — and is upgrading — the Harborplace pavilions in the Inner Harbor is in danger of defaulting on its loan for the property, according to analysts at the real estate research firm TreppWire.

Ashkenazy Acquisition Corp. paid General Growth Properties $100 million in 2012 for the pavilions at Pratt and Light streets and now owes about $67 million to UBS-Barclays Commercial Mortgage Trust.


The buildings, constructed in the 1980s, have long struggled to find the right tenant mix to appeal to local residents and tourists, and the analysts said vacancies could be an issue for the loan.

A number of restaurants and stores have left in recent years, including Urban Outfitters, Five Guys and Noodles & Co. But others have arrived, including Banana Republic, Build-A-Bear and Mason’s Famous Lobster Rolls.


Ashkenazy has been renovating the two Harborplace pavilions with a goal of transforming their 1980s-era appearance, eliminating the awnings and its interior mall-like layout, and giving the exterior a sleeker look with more windows and signage.

TreppWire’s analysts cited an alert from the rating agency Fitch that the loan had been sent to special servicing and faced imminent default. They said Ashkenazy has not missed a payment, but net operating income and cash flows have been declining for the past few years, possibly because it has not leased vacant space during the renovations that began in 2016.

Neither Ashkenazy nor UBS responded to a request for comment.

The company is a privately held and owns more than 100 buildings valued at about $12 billion in the United States, Canada and England, according to its website. It also owns The Village of Cross Keys, an upscale center in North Baltimore, that has experienced an exodus of tenants over time, but is now mostly leased, according to CoStar real estate information.

The company has struggled with other properties in the past. It lost shopping centers in Milwaukee and Tampa, Fla., years ago when it failed to make loan payments. At the time, officials said the markets were troubled.

In a possible good sign for Harborplace, the TreppWire analysts said their other research shows that urban-street retail properties like Harborplace, along with drug stores, have been performing well recently. Regional malls and neighborhood shopping centers, on the other hand, have the greatest number of loan defaults.