Pennyslvania mall sold for just $100
19 Jan 2017
A Pennsylvania mall that had been foreclosed after its owners failed to pay a $143 million debt was auctioned off for $100.
The Galleria at Pittsburgh Mills at Frazer Township had been in operation for 11 years and owed Wells Fargo Bank $133 million, borrowed in 2006.
The bank was a trustee for MSCI 2007 HQ11 – the trust that bought the 1.1 million-square-foot mall on Wednesday.
A legal sale notice said Wells Fargo was allowed to purchase the property without paying a deposit or the final price.
According to Wells Fargo the mall owed millions that included deferred payments, interest charges, and other costs, according to court documents obtained by the Pittsburgh Post-Gazette.
Though it remained unclear what the mall would turn out to be, many shoppers felt disappointed about the purchase.
The mall was supposed to have an indoor go-kart track and a water park but plans stalled due to its financial problems. The growing popularity of online shopping and the consequent decline of shoppers nationwide was also seen as a factor in the development.
The mall's value had dropped sharply in recent years. The Street reported that the 1.1 million square-foot property was once valued at $190 million, but was recently appraised at just $11 million.
While the Galleria was still open for business, only about 55 per cent of the mall was currently occupied, Tribune News reported.
According to commentators, The Galleria was not alone in not being able to attract shoppers. Also with traffic-drivers like Macy's and Sears closing stores across the US, mall owners are struggling to find retailers to replace them, they point out.
Vacancy rates in community shopping centres in the US increased in 30 of 77 US metro areas in 2016, up from 24 in 2015, and 19 in 2014, The Wall Street Journal reported, citing data from real estate researcher Reis Inc.
