Mervyn's buildings to be sold in foreclosure auction

<p>The former Mervyn's store building at the Santa Rosa Plaza shopping center is scheduled to be offered to bidders in a foreclosure auction Thursday along with 17 related properties around the state.</p><p>The two-story building, now partly filled by a Forever 21 store, is part of a real estate portfolio that was purchased in 2005. The owners have defaulted on nearly $180 million in loans for the various properties, according to public records.</p><p>Those properties belong to a joint venture of Ohio-based Developers Diversified Realty and Australian-based Macquarie DDR Trust.</p><p>The joint venture purchased 36 Mervyn's properties in September 2005 in a $396 million deal that included provisions to lease the spaces back to the retailer for 15 years. However, Mervyn's went out of business, closing its stores in late 2008.</p><p>Keegan &amp; Coppin retail broker Tom Laugero said the property sale "looked good on paper" but didn't work out once Mervyn's went bankrupt and the economy slid into a steep recession.</p><p>"It was a great deal as long as the tenant kept paying the rent," Laugero said.</p><p>Developers Diversified did not respond to a request for comment Monday.</p><p>A spokesman for the mall's owner, Indianapolis-based Simon Property Group, declined comment on the auction.</p><p>Such foreclosure sales typically present no immediate impact to tenants or shoppers.</p><p>While Simon owns most of the Plaza, Mervyn's took title to its space and sold it in 2005 to the joint venture.</p><p>Forever 21 opened a store in the bottom floor of the property in late 2010, almost two years after it was vacated. The top floor, amounting to roughly 45,000 square feet, remains vacant.</p><p>A spokesman for the trustee on the loan, Tustin-based Assured Lenders Services, confirmed Monday that the 18 properties are slated for a joint auction Thursday afternoon in the city of Martinez.</p><p>The 18 properties are located in such communities as Redding, Antioch, Clovis, Anaheim, Garden Grove and Burbank.</p><p>Virtually all of the properties sit in communities where Developers Diversified in 2005 announced it had purchased Mervyn's sites.</p><p>News Researcher Janet Balicki contributed to this story. </p><p>You can reach Staff Writer Robert Digitale at 521-5285 or robert.digitale@pressdemocrat.com</p>