A special servicer has reduced the appraisal of Independence Mall from $172 million to $58.4 million, a change that comes five months after a $110 million loan on the mall was reported in default, a research firm said Tuesday.

The servicer also gave an appraisal reduction amount (or ARA) of $60.34 million, according to a report by Trepp, a company that maintains a database of securitized mortgages for the commercial real estate and banking industries.

Because the $110 million loan that's been in default is now with the special servicer, "the servicer’s job is to give their best guess as to how much the property is currently worth,” said Sean Barrie, research analyst with Trepp, in an email Tuesday. “With that ARA in mind, IF the loan were to go to sale, the value would be $49,660,423. That number means the loan would hypothetically take a loss of over 55 percent.”

Madison Marquette, the company that handles marketing and leasing for Independence Mall, did not immediately answer a question about how the loan news might affect the mall’s operations, if at all.

Fitch Ratings, a credit ratings and research firm, in October said that the $110 million securitized J.P. Morgan loan on the mall had been transferred to CWCapital Asset Management, citing “monetary default” as the reason. Almost 500,000 square feet of the 1 million-square-foot mall at 3500 Oleander Drive, built in 1979, serves as collateral for the loan. That portion includes anchor tenant JC Penney.

Three other anchor stores at the mall, Sears, Dillard’s and Belk, own their own parcels, according to Trepp.  

The borrowing entity for the $110 million loan, Centro Independence, "is owned by Centro Watt America REIT 10, Inc. (71.5%), Westfield Group entities (5.9%), Hugh McRae II (7.5%) and the Oleander Company (15.0%)," according to Trepp's loan prospectus description.

“With such a low appraisal, it appears that a hope note is probable for the loan, but servicer commentary has not yet specified any proposed workout strategies,” according to Tuesday’s Trepp report on the mall loan.

Barrie said a “hope note” can divide a large balance in two, resulting in two more manageable balances.