North Carolina Mall Auction Delayed Again
The continuing delays of Independence Mall's foreclosure auction have left some Wilmington, N.C., area commercial real estate experts surprised at the lengthy process and curious about the mall's future.
The auction was announced for October 2015 when the mall's ownership group defaulted on a $110 million loan in March 2015. Since then, foreclosure auctions have been repeatedly scheduled to take place on the steps of the New Hanover County courthouse.
They've then been repeatedly cancelled by the mall's lienholder, JPMorgan Chase, then rescheduled, then cancelled again. Last month, the Triangle Business Journal reported that a buyer had stepped forward, but did not identify who that buyer might be.
Wilmington attorney Andrew McVey, who is overseeing the foreclosure proceedings, said in September he was not privy to the conversations between JPMorgan Chase and the mall's ownership group.
"I don't know" why the auction hasn't happened, said Hansen Matthews, a partner at the Wilmington commercial real estate firm Maus, Warwick and Matthews. "I'm frankly surprised that it's taken as long as it's taken to resolve itself in the court system."
The StarNews reported in July that nearly a quarter of the 108 smaller retail spaces at the mall appeared to be empty. The mall has about 1 million total square feet of space. The loan's collateral, though, was on about half of that space.
"It feels decidedly distressed," said Edward Graham, a finance professor at the University of North Carolina Wilmington who specializes in real estate.
But the mall's apparent decline comes as the Pointe at Barclay development continues to be built about 2 miles away at the intersection of Independence and South 17th Street. That development is similar to the successful Mayfaire Town Center on Military Cutoff Road, which is undergoing an expansion.
"Mayfaire has been a thundering success," Graham said. Retailers "have gravitated toward these town centers."
Matthews said a new owner could have multiple opportunities with the 44-acre space, given its prime location at one of Wilmington's busiest intersections.
"There's endless varieties on what someone can do with that property and the presence it has on Oleander and Independence," he said.
Graham agreed, saying he could envision a new owner renovating the mall's space to create a similar space, which he said would remain viable thanks to its location.
"It's a lovely piece of real estate," he said.