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Business Observer Friday, Oct. 22, 2021 1 year ago

Sale of shuttered mall approved by federal judge

A New York judge has approved the sale Bradenton's DeSoto Square Mall after three-day bankruptcy auction
by: Louis Llovio Commercial Real Estate Editor

A bankruptcy judge in New York has approved the sale of DeSoto Square Mall for $20 million according to the attorney representing DeSoto Owners LLC, the company that owned the mall when it shut down.

A hearing scheduled to approve the winning bid at a bankruptcy auction was held Oct. 20, but online court records did not disclose the results of the hearing.

In a one-line email to the Business Observer Friday, Isaac Nutovic, of the law firm Nutovic & Associates, says “The sale was approved.”

Court filings show that the winning bid came from Rompsen US Master Mortgage, the property’s lender. The second highest bid was for $18.5 million from Amzac Capital Management.

In all, there were 10 bidders for the property at the three-day auction that began Oct. 12.

The sale of the 569,675-square-foot mall includes Hudson’s Furniture and Firestone Complete Auto Care. 

DeSoto Square, which opened in 1973 and sits on 57.86 acres in Bradenton, closed in April after years of decline. Not long before that, its current owner, DeSoto Owners LLC, had filed for bankruptcy in an effort to buy time and restructure its finances.

In its initial bankruptcy filing, the owner claims the mall was at 40% occupancy at the time.

According to court papers, DeSoto Owners bought the mall, once a leading shopping destination in Manatee County, March 17, 2017 for $25.5 million with Rompsen providing the mortgage. Payments continued steadily for about the first year but the mall “never generated the income projected,” documents show. 

It eventually went into default and on Jan. 20, 2020 a judgement of foreclosure in the amount of $29.3 million was issued.  A foreclosure sale was scheduled for Sept. 23, 2020. DeSoto Owner filed for bankruptcy the day before the sale.

At the time of the filing, DeSoto officials said it did not believe it could restructure itself with the property continuing as a mall and said in court papers it wanted to redevelop the entire site into a mixed-use development.

According to the listing for the sale, there are plans for the redevelopment in place that would call for a 128,000-square-foot retail lifestyle center, 30,000-square-foot grocery store and two apartment communities totaling 705 units.

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