Mervyn's buildings to be sold in foreclosure auction
Published: Monday, August 27, 2012 at 5:29 p.m.
Last Modified: Tuesday, August 28, 2012 at 7:32 a.m.
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.
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.
Those properties belong to a joint venture of Ohio-based Developers Diversified Realty and Australian-based Macquarie DDR Trust.
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.
Keegan & 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.
"It was a great deal as long as the tenant kept paying the rent," Laugero said.
Developers Diversified did not respond to a request for comment Monday.
A spokesman for the mall's owner, Indianapolis-based Simon Property Group, declined comment on the auction.
Such foreclosure sales typically present no immediate impact to tenants or shoppers.
While Simon owns most of the Plaza, Mervyn's took title to its space and sold it in 2005 to the joint venture.
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.
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.
The 18 properties are located in such communities as Redding, Antioch, Clovis, Anaheim, Garden Grove and Burbank.
Virtually all of the properties sit in communities where Developers Diversified in 2005 announced it had purchased Mervyn's sites.
News Researcher Janet Balicki contributed to this story.
You can reach Staff Writer Robert Digitale at 521-5285 or email@example.com
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