Mall at the Source fails to find buyers at auction
The Source mall is slated to be sold at a foreclosure auction on Aug. 28, according to PropertyShark. (March 28, 2012) Credit: Kevin P. Coughlin
The Mall at the Source is now owned by its lenders, after it found no buyers willing to pay $148 million at a foreclosure auction Tuesday.
The attorney representing the mall’s bondholders, Scott Tross, said the new owner will probably not hold onto the mall.
“It’s likely that it will be resold,” Tross said after the auction, though he declined to give a timetable. The new owner is known as CMAT 1999-C1 Old Country Road LLC, the trust that represents the mall’s bondholders.
The sale will not interrupt business at the mall, said Bud Perrone, a spokesman for Miami Beach-based LNR Partners, which services the loan.
A hit with shoppers when it opened in 1997, the mall has struggled in recent years after the departure of former anchor tenant Fortunoff and other major retailers. It is likely to be 75 percent vacant by next month, according to local brokers.
The sale is good news, since the lenders will probably seek to bring in new stores within six to nine months, to prepare it for an eventual resale, said Jeremy Isaacs, a broker with Ripco Real Estate in Jericho. “Right now there is someone in charge, someone who will focus on it and try to turn it around,” he said. “So it’s all good.”
The auction took place at 11:30 a.m. at Nassau County Supreme Court in Mineola. It lasted slightly more than a minute. One bidder, who gave his name only as Michael and described himself after the auction as a broker from the tri-state region, offered a final price of $25 million. Tross outbid him by $100,000.
The lenders now take possession of the mall, but no money will actually change hands as a result of the sale, according to a person who is familiar with the transaction.
The mall's outstanding debt is nearly $142 million, according to the legal notice advertising the foreclosure sale. The additional $6 million is accrued interest, Tross said after the auction.
The retail center’s value was appraised at $51 million in May, according to Trepp, which publishes information on commercial loans.
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