DeSoto Square Mall appears set to change hands to new owner

De Soto Square Mall, Bradenton, Fl
*** Picture by MARC R. MASFERRER/Bradenton Herald

DeSoto Square Mall appears set to change hands to new owner

By John Hielscher
Published: Wednesday, May 23, 2012 at 5:11 p.m.

De Soto Square Mall, Bradenton, Fl

BRADENTON – The owner of the long-neglected DeSoto Square Mall has listed the property for sale and might be close to a deal, a move that analysts say could prompt a renovation or other enhancement.

Simon Property Group — which has owned the mall for the past 16 years as its value plunged through recession and lack of upgrades — declined to discuss any potential sale, as did CBRE, the commercial real estate brokerage firm trying to sell the 693,000-square-foot mall.

But commercial mortgage analyst Trepp LLC has reported that a letter of intent to sell the 39-year-old mall has been signed by Simon and an unidentified buyer. Under terms of the deal, the buyer will also assume at least some debt on DeSoto Square, Trepp reported, citing information from a loan servicer.

Letters of intent are common instruments in the retail industry and do not guarantee an eventual transaction.

But experts said a sale could benefit the mall, resulting in new tenants and cosmetic improvements for DeSoto Square, anchored by Macy’s, JCPenny and Sears. A Dillard’s department store, which had been a fourth DeSoto anchor, closed in late 2009.

Simon’s timing in selling, too, may also be opportune, because investors are showing more interest of late in properties like DeSoto Square, which are considered secondary, or Class B malls, in the retail industry, said retail consultant Jeff Green.

Unlike so-called Class A malls, such as International Plaza, in Tampa, which are full, investors view malls like DeSoto Square as opportunities to add value with new merchants or higher rental rates.

“You can improve the tenant mix and hopefully get higher rents,” Green said. “You can densify the site by adding non-retail uses, like office or residential or a hotel. There is a lot that can be done to B malls.”

But Green does not expect a new owner to pump millions of dollars into DeSoto Square.

Whoever buys it will maybe do more of a remodel than a redevelopment,” Green added. “It’s not the time for developers to spend a ton of money on redevelopment.”

If consummated, a sale would resolve a more than two-year conflict between Simon and its lender on the mall
, the $62 million loan on which fell to “imminent monetary default” in 2010, Trepp reported.

In response, Simon offered to turn the mall over to the lenders, but the world’s largest real estate company instead retained ownership
. The loan was sent to a special servicer later that year, Trepp reported.

Simon’s debt on DeSoto Square is backed by nearly 500,000 square feet of the property, and represents nearly 8 percent of the collateral of a $1 billion pool of securitized commercial mortgages managed by Merrill Lynch Mortgage Trust.

For Full Article, click here <——-


1 Comment

Filed under Commericial Real Estate Articles & News

One response to “DeSoto Square Mall appears set to change hands to new owner

  1. Pingback: Berkshire Apartments Tampa Fl

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s