Christmas decorations at The Grove outdoor shopping center in Los Angeles.


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It was called “jingle mail” during the last recession.

Real estate owners in the wake of the 2007-2008 financial crisis who opted not to fight to keep their homes or commercial properties, instead sent back the keys to lenders to sort out the mortgage mess.

Simon Property Group
SPG,
+8.04%
,
the largest U.S. retail real-estate investment Trust (REIT) and shopping center operator, recently took similar actions on four of its struggling shopping malls that have $410.9 million of mortgage debt, according to a team at KBRA Credit Profile, a research arm of Kroll Bond Rating Agency.

Read: Simon Property, Taubman agree to price cut in reverse merger

The mall owner indicated it would engage in a “friendly foreclosure” of the Mall at Tuttle Crossing in Dublin, Ohio, and the Southridge Mall in Greendale, Wis., in monthly property reports to bond investors, according to the team.

It also revealed it no longer would inject capital into the Montgomery Mall in North Wales, Pa., and would give the lender back Simon’s title interest in the Crystal Mall in Waterford, Conn., the monthly reports showed.

Retail properties and hotels have been the hardest-hit commercial property types by the global pandemic, first by mandatory orders in March by state and local officials to temporarily close businesses as COVID-19 cases surged, but also by the surge in online shopping in subsequent months that’s cut property cash flows, as well as other stresses in 2020.

“While characterized as having operational expertise and deep brand relationships that support quality tenant rosters, SPG is not immune to the adverse effects of the pandemic,” the KBRA Credit Profile team wrote.

The team also said that the performance of the properties “has deteriorated significantly” since the mortgage debt was originated, “substantiating SPG’s decision to hand over the keys amid the weight of the coronavirus (COVID-19) pandemic.”

To that end, the team identified another $963.4 million of debt on Simon malls that it categorized as a high credit risk, due to falling cash flows or other financial metrics that point to potential stress.

A spokesperson for Simon did not respond to request for comment.

Related: Pandemic could force 30-35% of U.S. shopping malls to close permanently, warns Morgan Stanley

COVID-19 infections this week hit grim records in the U.S. and several states and cities have imposed new curfews on bars and restaurants, while others have suggested residents stay home.

“We have withstood COVID. We have withstood government shutdowns. We have withstood lack of federal and state help, especially in real estate taxes,” said David Simon, the REIT’s CEO and president, on its third-quarter earnings call on Monday.

“We have withstood fires in Northern California, hurricanes in Louisiana and elsewhere and civil unrest,” he added, as the REIT reported disappointing third-quarter earnings.

Shares of Simon Property Group soared 8% Friday, but were still 49.9% lower in the year to date, according to FactSet. U.S. stock indexes ended higher Friday, with the S&P 500 index
SPX,
+1.36%

booking a record.

To be sure, the pandemic didn’t cause retail all of its woes. It just accelerated problems, putting 2020 on track to set the record for the highest number of retail bankruptcies and store closings in a single year, according to BDO Global.

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