Fiesta Mall’s $6.72 million sale price pales in comparison to the $135 million Macerich paid for the property less than 20 years ago.
In September 2013, Macerich “conveyed the property to the lender by a deed-in-lieu of foreclosure,” according to SEC filings. The lender was Bank of America, and the property had an $83 million CMBS loan.
Bank of America’s special servicer, LNR Properties, cared for the property since 2013 and was the seller in the most recent transaction. The sale took place on the Ten-X online real estate marketplace, and brokers from CBRE marketed the property on behalf of the seller.
LNR decided to sell the property in order to put it in the hands of ownership that could provide the cash infusion necessary for redevelopment.
“(The seller) truly believes in what the buyer is going to be doing with the property in terms of adaptive reuse,” CBRE Senior Vice President Glenn Smigiel said.
In fact, LNR Properties initially explored redeveloping the property on its own. However, due to the company’s structure, it could not put together the capital necessary for the redevelopment, Smigiel said.
Representatives from the city of Mesa had previously met with LNR to walk the mall, give the ownership feedback, and discuss what efforts were necessary to revitalize the property.
When LNR finally made the decision to auction the property, it listed the city’s Office of Economic Development as a key contact for prospective buyers in order to ensure the new ownership group and the city were on the same page, said Lori Gray, senior project manager at Mesa’s Office of Economic Development.
New owner Dimension Financial & Realty Investments Inc. plans to invest $30 million to turn the shopping center into a higher-education facility, said Ray Cashen, president and designated broker at Cashen Real Estate Advisors, which represented DFRI in the sale and will market the property.
DFRI and its principals Jerry Tokoph and Wayne Howard have a track record of infill redevelopment in the Valley, including the redevelopment of the former Honeywell/Bull 160-acre mixed-use facility at Interstate 17 and Thunderbird Road in Phoenix.
– Reach Wayne Schutsky at 480-898-6533 or firstname.lastname@example.org.