Eastland Center goes into receivership
Eastland Center has gone into receivership after the mall owners stopped making loan payments.
U.S. District Court Judge Gershwin Drain last month appointed New York-based Spinoso Management Group as receiver of the property in Harper Woods.
New Eastland Mall Developer LLC, a part of Ashkenazy Acquisition Corp., owes more than $42.4 million of the $46 million it borrowed in 2006, according to a complaint filed in May in U.S. District Court.
Eastland Center is listed as being in foreclosure because the company is more than 90 days late on loan payments, said Sean Barrie, a research analyst for Trepp LLC, a New York-based company that tracks commercial mortgage-backed securities.
“That does not mean that they are ready to foreclose on the property or loan,” Barrie said. “They could pursue it as a possibility while the special servicer finds some way to find some stable tenants.”
In March, the loan was transferred to Needham, Mass.-based CWCapital Asset Management LLC for special servicing.
Ashkenazy Acquisition Corp. also owned the now-closed Northland Center in Southfield. Representatives did not immediately return calls seeking comment Monday evening.
At the end of 2014, the 1.4 million-square-foot Eastland Center had an occupancy rate of 76 percent. In the first quarter of 2015, that number jumped to 89 percent, Barrie said. “That’s a nice increase, but many (tenants) are month to month,” Barrie said. “I would take that with a grain of salt.”
In 2011, Sears announced it would close store there.
Barrie also noted that the appraisal value of one of two loans that make up the original $46 million debt — a $37.2 million balance on an original $39.5 million — is now worth only $9.7 million.
“They’ve determined the current balance of the loan isn’t reflecting what the loan is worth,” he said.
Eastland has long been plagued by incidents of crime. One of the most recent was Mother’s Day, when the mall closed for the day after a suspect fired three shots inside the center.