Taubman Centers Inc. turned Regency Square — an 820,000-square-foot mall in Richmond — over to its mortgage lender in lieu of foreclosure.
The mall, home to two Macy’s, a J.C. Penney and a Sears, was built in 1975 and has been owned by the real estate investment firm since 1997.
Regency Square was hit hard in the economic downturn when operating income fell and capital requirements rose, prompting Taubman to throw in the towel. In the third quarter of 2009, the real estate firm said it would take a $59 million impairment charge on its investment. Since then, the company has seen net losses at the center, which started to accrue default interest on its mortgage debt.
The move took $72.2 million in debt and accrued interest off the books of Taubman, which also anticipates a $45 million accounting gain in this quarter. The Bloomfield Hills, Mich.-based firm still has a portfolio of 26 properties.
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The title of Regency Square was transferred to LNR Partners as special servicer and Jones Lang LaSalle has been hired to manage the property.
“Regency Square is an outstanding mall ideally located in the heart of Virginia’s capital city,” said Greg Maloney, president and chief executive officer of Jones Lang LaSalle Retail. “Our team will find solutions and efficiencies that capture the value of everything that Regency Square has to offer.”