The troubled Bangor Mall, whose fate has been sinking since its former owners defaulted on a $10 million loan in October 2017, has been listed for sale by Ten-X, the same auctioneering website that auctioned off the former Macy’s location in the mall.
The auction, for 531,032 square feet of rentable space, will be held Feb. 25-27 at noon online, according to the Ten-X website.
“Yes, [the Bangor Mall] is for sale,” Frederick Meno, president and CEO of asset services at The Woodmont Co., wrote in an email to the Bangor Daily News. “The decision for the timing of the sale was made by the property owner.”
A Penobscot County Superior Court judge in July appointed The Woodmont Co. to act as a receiver for the mall, meaning it is managing all mall operations on behalf of its current owner, MSCI 2007-IQ16 Stillwater Avenue LLC.
Simon Property formally turned over the property to MSCI via a deed in lieu of foreclosure on Jan. 2 of this year. The deed in lieu is a way to quickly hand over a property.
The auctioneering firm has partnered with Newmark Knight Frank, a New York commercial real estate advisory firm, to market the Bangor Mall on an exclusive basis.
The starting bid is $6.5 million, with a $50,000 deposit due from bidders that wish to participate. The auctioneers will get 5 percent of the winning bid as a transaction fee.
Ten-X and Bangor Mall management were not immediately available for comment.
The Ten-X notice said the mall, composed of five buildings built in 1978 and renovated in 1998, has 71.9 percent occupancy rate and is the only enclosed regional mall in a 137-mile radius. Some of the occupants include Bangor Mall Cinemas 10, Chick-fil-A, Dick’s Sporting Goods, Furniture Mattresses & More, Hannaford, JC Penney and Pizzeria Uno.
Gross income is $7.8 million and net operating income is $3.7 million.
The value of the mall’s property has been falling since the October 2017 loan default.
The city of Bangor reduced the value of the mall’s leasable space by 22 percent for fiscal 2019, which started July 1, 2018. It dropped the value to $47.4 million as of April 1, 2018, from $60.9 million as of April 1, 2017, according to fiscal 2019 assessed values provided by the Bangor assessor’s office.
LNR in August dropped the appraised value by 40 percent to $17.3 million from the $28.9 million appraised in October 2017, according to Trepp, a New York-based data analysis firm that tracks commercial mortgages. LNR is a special servicer handling an $80 million loan against the mall that former primary owner Simon Property of Indianapolis took out in 2007 and defaulted on in 2017.
The Bangor Mall’s predicament is not unusual as malls around the country lose customers to online retailers, Manus Clancy, senior managing director at Trepp, said in October when the mall’s appraised value dropped. It is not uncommon for malls to be fixed up and renew leases before a sale.
Bangor city assessor Phil Drew said in October that when he began assessing the mall for the 2019 tax year in January, he “recognized the economic realities of the changes among stores on Bangor Mall Boulevard.”
He said of the two types of properties within the mall, the anchor stores had lost 38 percent of occupancy when Sears closed its Bangor Mall store in April. That’s among the 267,000 square feet of the three anchor stores owned by the mall. The empty Sears store occupies 102,000 square feet of that.
The fourth anchor, the former Macy’s store now occupied by Furniture Mattress & More, is owned separately by Miami developer Out of the Box.
Improving the mall for sale
In a September interview with the BDN, Meno of The Woodmont Co. said he believes the best use for the Bangor Mall is to continue as a regional enclosed shopping center.
“As such, the continued leasing focus will be to bring full and off price retailers to the mall and the adjacent out parcels that are part of the mall,” he said.
Meno would only say the leases were multi year. It is not clear whether there are early cancellation clauses in the leases.