Written by Steve Watson from The Buffalo News
“The Boulevard Mall, the oldest enclosed shopping mall in the region, has a new owner after Forest City Enterprises gave up control rather than go through a foreclosure.
But there aren’t likely to be any changes for shoppers and tenants in the near future.
Forest City, which was facing a legal seizure after defaulting on its $92 million loan, turned over the deed on the Amherst mall to LNR Partners. The Miami-based company, which is known as a “special servicer,” held the mortgage on the property on behalf of Wall Street investors, and had been negotiating with Forest City to collect on the troubled loan.
Now, LNR will seeking to preserve and maximize the property’s value for those investors until it can resell the mall to a new owner and recoup its losses on the loan.
Zamias Services, a national property management company based in Johnstown, Pa., will serve as the new management and leasing company for the mall, the company confirmed to The Buffalo News late Monday afternoon.
Zamias, which was the developer and original owner of the McKinley Mall in Hamburg, expects everything to continue as it is at the Boulevard Mall, according to a company representative.
Like other mall tenants, Laux Sporting Goods manager Joe Eckl is hopeful the transaction will be a good thing for retail tenants. LNR Partners would likely want to make the mall as attractive as possible to potential buyers. That would mean taking good care of the mall and its tenants.
“You can’t sell a mall that’s struggling. You want it to be well kept. You want it to be successful,” Eckl said.
On paper, the transaction was recorded in the Erie County Clerk’s Office on Friday as a deed in lieu of foreclosure for $96.8 million, with LNR buying the property through a limited-liability company called GCCFC 2007-GG9 Niagara Falls Boulevard LLC. The original loan was made by Greenwich Capital Corp., or GCC, and was packaged for sale on Wall Street in 2007.
The transaction was valued at nearly $97 million, the amount of debt on the property, but no money changed hands in the deal that wasn’t conducted at arm’s length.
The deed indicates the assessed value of the 62.4-acre property at 1285 Niagara Falls Blvd. is $53 million.
The town Assessor’s Office shows the six mall parcels that are owned by Forest City entities have a combined assessed value of $60.8 million. That doesn’t count the former Macy’s Men’s Store that is owned separately.
The sale contract closed on Nov. 22, according to the deed.
Representatives from LNR Partners, the Boulevard Mall and Forest City did not respond to requests for comment Monday.
The owner, Forest City, which built and opened the sprawling Amherst shopping center in 1962, had put it up for sale in July 2016. In February, Forest City defaulted on the $92 million loan payment it was required to make, a payment that is far higher than the value the Cleveland-based company had assigned to the mall.
The mall, which was renovated or expanded in 1978, 1981, 1994, 1997, 2000 and again in 2015, is located at Niagara Falls Boulevard and Maple Road.
At the time of the listing, it was anchored by two Macy’s stores, JCPenney, a two-story Sears, Buy Buy Baby, Michael’s, H&M and a new 55,000-square-foot Dick’s Sporting Goods. Since then, Sears closed and Macy’s Men’s closed its store and moved into its main Macy’s store in the mall. Benderson Development Co. bought the Macy’s Men’s Store in the mall.
“Any new direction for the property will benefit both the former Macy’s that Benderson purchased as well as the Sears building that we are marketing,” said David L. Schiller, an associate broker with Cushman & Wakefield Pyramid Brokerage, which was retained by Sears to find someone to sublease its Boulevard Mall location.
