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SEMINOLE — It took three years of negotiation with the lender, but Downtown Seminole LLC, owner of the Seminole Mall in Pinellas County, has sold the mall for $14.6 million.
Investors led by North American Development Group, based in West Palm Beach, snapped up the 425,000-square-foot regional mall in a short sale, says Frank Boullosa of FAB Properties, director of lender services for Ross Realty, who represented the seller and led the lender negotiations.
Downtown Seminole purchased the property in 2006 for $35 million, says Boullosa. However, the property was “underwater” at the time of the sale, announced this week, meaning that its loan was greater than the current value of the property.
“It was a long and arduous process,” the broker says, trying to get the lender, owner and buyers to agree on an acceptable price. That process took three years. “The actual pool of loans was created in 2005.”
As was typical of commercial mortgage-backed securities (CMBS) at that time, the mall loan was put into a pool with more than 100 other loans, says Boullosa. “Rather than having an investment in one shopping center, you have in investment in 100 properties. The market crashed and a lot of those loans were underwater.”
Part of the difficulty in reaching a price agreement, was that there was not a “single” lender, but a group of lenders, which made decision-making a cumbersome process. In addition to the logistics, “everybody wants to get the best price,” from the seller to the lender and new investors, the broker says.
The Seminole Mall investors are not alone in enduring the tedious process of selling commercial property encumbered with CMBS loans, according to agents. Similar negotiations with underwater properties are going on all over Tampa Bay, and throughout the country.
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