Foreclosure for the San Francisco Centre Mall

The foreclosure process is underway for the San Francisco Centre, a shopping mall that went from being a bustling commercial hub of the city to a lonely and abandoned place.

Unibail-Rodamco-Westfield and Brookfield Properties, former owners of the shopping center, stopped paying a $558 million loan over a year ago and decided to abandon the 800,000-square-foot property. Now, a public auction is scheduled to take place on the steps of the Memorial Court on Van Ness Avenue.

Technically, in this foreclosure auction, the property will be transferred to the highest bidder, so anyone can make an offer for the shopping center.

Joel Zeldin, a lawyer from Shartsis Friese specializing in complex commercial litigation with over 50 years of legal career, and who is not involved in the sale process, says that the auction of the San Francisco Centre, a property that is in serious trouble, is typically a process for lenders, in this case, Deutsche Bank AG and JPMorgan Chase Bank, to make their own “credit bid.”

In his experience with real estate foreclosures, Zeldin says: “it is unlikely that a local buyer will emerge in a case like this, they would have already appeared and tried to negotiate directly with the borrower and the creditor a long time ago.”

And Zeldin continues, “generally, defaulting borrowers want to move on and leave behind failed investments, but in a judicial foreclosure, which requires court approval, the borrower may face a judgment that allows the lender to recover the amount by which the outstanding loan balance and other costs exceed the lender’s winning credit bid.”

At this point, interest and penalties have been accumulating on the debt of the former owners of the shopping center, which has increased the loan amount to $625.6 million, according to the auction notice.

Gregg Williams of Trident Pacific, a firm overseeing the property as appointed by the court, said that the notice simply reflects that the lenders are moving forward with the foreclosure process as planned. Trident and the real estate firm JLL, who will continue to manage the shopping center until its sale, have the authority to collect rents, negotiate lease agreements, and make changes to the property, as long as they adhere to their fiduciary duty to preserve as much of the asset’s value as possible.

Regarding the future sale of the property, Zeldin said that, in his experience, the lender will likely hire a high-level broker, who will already have a list of potential buyers; and once it is officially on the market, the Centre Mall will be one of several prime retail properties for sale in the city of San Francisco.

Available Foreclosures:

San Francisco: 1 home available

By Elías DaSilva | 21 de Noviembre de 2024.