New York investor David Lichtenstein’s bet on four small-town malls didn’t pan out, leading him to forfeit the properties to his mortgage holders in 2009. It now appears the deal also was a big loser for investors in the malls’ $73.9-million securitized mortgage.
The last of the four malls recently was sold by the company that oversees the loan on behalf of bond investors, C-III Asset Management, and the final tally looks bleak: The bondholders recouped 22% of the initial loan amount, or roughly $16.4 million, according to real-estate research service Trepp LLC.
The loan was retired last month after C-III sold the fourth mall, Mount Berry Square Mall in Rome, GA, to Hull Storey Gibson Cos. for an undisclosed price. In 2010, Jones Lang LaSalle brokered the sale of the Martinsburg Mall in Martinsburg, WV for $11 million and Bradley Square Mall in Cleveland, TN for $4.4 million. The fate of another of the four properties, Shenango Valley Mall in Hermitage, PA, couldn’t be determined.
Mr. Lichtenstein said Tuesday he could have kept the properties if C-III had agreed to defer some of the mortgage’s amortization payments. A C-III representative declined to comment. Mr. Lichtenstein is better known for buying Extended Stay Hotels for $8 billion in 2007 and putting the chain into bankruptcy protection in 2009.