Foreclosure action has begun against Macon [Georgia] Mall because of nonpayment on a $141.2 million loan, and a new management company has been approved by the court to take control of the 1.4 million-square-foot facility.The Shopping Center Economic Model Is History. More mall foreclosures are coming. 50-60% writeoffs will be common, and dozens of already stressed banks will fail as a result.
"We don't expect any operational interruptions to the mall," said Brooke Houghton, spokeswoman for Chicago-based Jones Lang LaSalle Americas Inc., the court-appointed retail management company now managing Macon Mall. "We don't think there will be any impact on the stores or the customers we serve. We are open and ready for business as usual."
According to court documents, in June 2005 when New Jersey-based The Lightstone Group borrowed $141.2 million, Macon Mall LLC and Burlington Mall LLC in North Carolina were used as collateral for the loan, as well as rents and other income from the properties. The company purchased the two malls about the same time in 2005 for $166 million. The loan currently is held by LaSalle Bank National Association as trustee for a trust that holds and owns a pool of loans including the one for Macon Mall. The trust filed the complaint.
Since the loan was made, Parisians and the Piccadilly Cafeteria have closed at the mall, and Linens-N-Things - part of the mall property, even though it's not inside the main building - is in the process of closing.
In a letter filed in the case, "Dillard's has apparently communicated its intent to close its store location at Macon Mall."
Based on an appraisal "the value of the property has fallen approximately 60 percent since June 30, 2005."
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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