Escrow on the Sequoia Mall is set to close November 15th, according to John Dubois, an owner of Core Commercial, the listing broker on the property.
“I’m fairly positive the sale will go through” said Dubois, “The buyers have passed through several stages where they have put down significant amounts of non-refundable money. They seem serious.” The buyers are in the due diligence stage of the purchase and are scheduled to waive all contingencies on October 11th. According to city staff, the purchase is a short sale. A short sale is when the property is being sold for less than what is owed to the bank. The estimated purchase price is said to have been $10-14 million.
Until recently, rumors have ranged from a local owner buying the property and filling the mall with tenants to out-of-town owners planning on tearing it down. The identity of the buyer is still unknown.
Core Commercial specializes in retail leasing and retail sales, and is based in Sacramento. According to their website, “As a boutique firm we are small enough to collaborate and share information about retail tenants, lease rates and capital market trends, and yet we’re large enough to provide all the resources and support available to the national firms.”
The listing description for the mall says, “this offering portion of Sequoia Mall includes 228,789 square footage of gross leasable area on 24.4 acres. It includes the enclosed mall portion, theatre, one anchor (vacant) and multiple outparcels and buildable pads. The offering also includes Tower Plaza, occupied by Bed Bath & Beyond, Marshalls, and a bridal boutique.” The purchase may have been made more complicated because parts of the mall are independently owned and might, or might not be, part of the sale, such as Sears, Hobby Lobby and RaboBank.
The ladies in charge of the American Association of University Women (AAUW) book sale were kept in limbo about whether the mall would be available for their fundraising event. Initially, the mall manager, Diane Sherrill, told them not to count on the mall being available. But last Friday, Sherrill green-lighted the sale, insisting that she still didn’t know what was going on. At the same time, the organizer of Just Between Friends, a consignment sale in the former Ross, was told by Sherrill the mall was making no further commitments when she asked about the space again for this December.
Although located at one of the busiest intersections in Visalia, the Sequoia Mall has always struggled with a high vacancy rate. In 1998, the mall was sold to KIMCO Realty Corporation which is headquartered in New Hyde Park, New York. In addition to owning and operating one of the country’s largest portfolios of neighborhood and community shopping centers, KIMCO holds interests in shopping centers in Puerto Rico, Canada, Mexico and South America. The company has specialized in shopping center acquisitions, development and management for more than 50 years, claiming some 874 at present.
KIMCO claims to have “pioneered the modern Real Estate Investment Trust era,” and Sequoia Mall was just one of the hundreds of properties in their portfolio. A Real Estate Investment Trust (REIT) is a company that owns, and in most cases, operates income-producing real estate such as apartments, shopping centers, offices, hotels and warehouses.
Revenues from REITs derive principally from the properties’ rents. Investing in REITs is a liquid, dividend-paying means of participating in the real estate market without having to actually own property. It is akin to buying stock.
With the “owners” back east, and selling shares of the property to uninterested parties, it’s no wonder that Sequoia Mall has always been the ugly step sister to the Visalia Mall. For lack of tenants and the loss of Borders, the property went into foreclosure. In the summer of 2012, the mall came out of foreclosure and went back on the market, at which time several interested parties bid on the property. One of those interested was a large local developer. That sale never went through and word on the street is that the mall went back into receivership.
The property was pulled out of foreclosure and put back on the market about six months ago and was advertised as, “For sale on best offer basis.” Again there were several players, one being local. Hopes were high at the time that, because a possible local developer was getting such a great deal, the savings would be put into a much-needed remodel, making the mall more attractive to tenants.
The mall’s managing company remains the Schottenstein Property Group, which refers all questions to mall manager Diane Sherrill. Sherrill has had no comment. The few tenants left at the mall have not been kept informed and cannot get any information from Sherrill. They did hear from the janitor that the mall was sold to a local.