General Growth Properties sold its Chapel Hills Mall, a 1.2-square-foot mall in Colorado Spring, this month for $71.5 million - a 36% markdown to the malls $111.9 million outstanding debt on the property carried at the time of the sale. The original loan amount taken out in late 2005 was $122 million.
The property had been on the market basically since GGP filed for bankruptcy protection in April 2009. It exited bankruptcy earlier this year. GGP originally acquired the property in 1993.
The buyer, a joint venture between Coyote Management LP in Addison, TX, and Garrison Investment Group in New York, purchased the property as a value-add opportunity to lease up and stabilize. The total occupancy for Chapel Hills Mall was around 85% at the time of sale, including anchor space. It was not known what the inline store vacancy was.
"Coyote has identified numerous opportunities to increase the properties long-term income through leasing initiatives, redevelopment and marketing/sponsorship programs," said John N. Desco, Coyote's senior vice president of asset management.
GGP developed the Chapel Hills Mall in 1982, expanded in 1985 and further renovated and expanded in 1998.
According to a story published in The Gazette, a Colorado Springs newspaper, the mall had lost several well known tenants in the past few years, including Mervyn's, Kmart and Old Navy. In addition, newer, open-air shopping centers such as First & Main Town Center to the east and Promenade Shops at Briargate to the north have become more trendy shopping areas.
The sale did not include the mall's anchor stores which own their space: Macy's, Dillards, Burlington Coat Factory and a former Kmart store.
Prior to the sale, the loan on the mall properties had been the fourth largest asset in the LBUBS 2006-C1 commercial mortgage backed securities.
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