June 24, 2016

Greendale Mall sold for $11.8M; future uncertain

Laura Finaldi
The Greendale Mall was sold Friday morning for $11.8 million. Its future remains uncertain.

The Greendale Mall was sold at an auction in the struggling mall's parking lot Friday morning to Chicago law firm Seyfarth Shaw LLP for $11.8 million, which represented the company holding the mortgage on the property.

The 309,000-square-foot mall, that has been underperforming for some time and lacks tenants, has been foreclosed on. The foreclosure was filed by Capmark Finance Inc. against Mayflower Greendale, L.P., according to a public notice. The mall was owned and managed by Simon Property Group that also owns and operates the Auburn Mall and Solomon Pond Mall in Marlborough.

Attorney Robert Pearce, from Seyfarth Shaw's Boston office, did not give details on what the mortgage holder planned to do with the property, which is Worcester's only remaining mall.

The Greendale Mall has been in financial trouble, with only an 80-percent occupancy rate, leading to the mall not bringing enough profits in to cover the $45-million commercial mortgage-backed securities (CMBS) loan on the property, according to Trepp, a data provider for those in the commercial real estate. That resulted in the loan being foreclosed on and sent out to special servicer C-III Asset Management in October of last year.

The property was recently revalued by that organization at $14.7 million, or 23 percent of the $65 million it was valued at in 2006. That news came as the mall has struggled to bring in revenue and faces down major tenants with leases soon to expire, such as Best Buy, whose lease expires in 2017.

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