Bidding in an online auction for the beleaguered Bangor Mall started at 11 a.m. Monday.
The Bangor Daily News first confirmed the auction sale on Jan. 19, when mall manager Frederick Meno wrote in an email, “Yes, [the Bangor Mall] is for sale. The decision for the timing of the sale was made by the property owner.”
Meno is president and CEO of asset services at The Woodmont Co., which also manages the troubled Aroostook Centre Mall. Ten-X also has advertised that mall for sale at the best offer price.
The starting bid for the Bangor Mall is $6.5 million, with a $50,000 deposit due from bidders who wish to participate. The auctioneers will receive 5 percent of the winning bid as a transaction fee.
The mall’s fate has been sinking since its former owners, Simon Property of Indianapolis, defaulted on a $80 million loan in October 2017. Experts attributed the mall’s decline to a consumer shift to different ways of shopping, including online buying.
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.
Ten-X said it will post the final bid when the auction ends Wednesday.
The Ten-X description of the mall says it has leasable space of 651,032. About 72 percent of the mall is occupied.
“Bangor Mall is the only enclosed regional mall within 137 miles in any direction, making it the nexus of local retailing activity in the region,” Ten-X said.
The mall has net operating income of about $2.7 million and gross income of about $6.9 million.
During its prime from 2011 to 2015, the mall had more than $14 million in gross income, reaching a high of $14.8 million in 2014, according to Trepp, a New York-based data analysis firm that tracks commercial mortgages.
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 valuations provided by the Bangor assessor’s office.
Both Hannaford and JC Penney recently executed five-year options to extend their respective lease terms through February 2024.
Some of the occupants include Bangor Mall Cinemas 10, Chick-fil-A, Dick’s Sporting Goods, Furniture Mattresses & More, Hannaford, J.C. Penney and Uno Pizzeria and Grill.
Dick’s and J.C. Penney are anchor tenants. The former Sears store, another anchor, has not yet been leased.
And Furniture Mattresses & More opened in the former Macy’s location as a shadow anchor tenant. The property is not owned by the mall.
Correction: An earlier version of this report misstated the loan amount the Bangor Mall's former owner defaulted on in October 2017.