Pittsburgh Mall Once Worth $190 Million Sells For $100

Tyler Durden's picture

We have frequently noted the precarious state of the U.S. mall REITs (see "Myopic Markets & The Looming Mall REITs Massacre" and "Is CMBS The Next "Shoe To Drop"? GGP Sales Suggest Commercial Real Estate Crashing"), but the epic collapse of the Galleria at Pittsburgh Mills paints a uniquely horrific outlook for mall operators.  The 1.1 million square foot mall, once valued at $190 million after being opened in 2005, sold at a foreclosure auction this morning for $100 (yes, not million...just $100).  According to CBS Pittsburgh, the mall was purchased by its lender, Wells Fargo, which credit bid it's $143 million loan balance, which was originated in 2006, to acquire the property.

 

Like many malls around the country, Pittsburgh Mills has suffered the consequences of weak traffic amid tepid demand from the struggling U.S. consumer resulting in massive tenant losses.  According to the Pittsburgh Tribune, the mall is only 55% occupied and was last appraised for $11 million back in August. 

The value of the mall has been plummeting since it opened in July 2005. Once worth $190 million, it was appraised at $11 million in August.

 

The mall has lost a number of key tenants over the years, including a Sears Grand store. The mall's retail space is nearly half empty, with about 55 percent occupied.

 

Mall

 

Of course, New York Fed President Bill Dudley laid out a very compelling case for retailers yesterday if he can just convince American homeowners to commit the same mistakes they made back in 2006 by repeatedly withdrawing all of the equity in their homes to fund meaningless shopping sprees.  So it's probably safe to keep buying those mall REITs...afterall those 3% dividend yields are amazing alternatives to Treasuries and you're basically taking the same risk...assuming you overlook the billions of property-level debt that ranks senior to your equity position.  

Mall REITS

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peddling-fiction's picture

Now that's the way to do it, money for nothing and the chicks for free.

Arrowflinger's picture

Less than 2 cents per fraud-committing Wells Fargo employee! Bullish indeed.

Save_America1st's picture

not a shocker...the bank bought the once valuable real estate for 100 bucks.  I'm sure there were no other higher bidders, right, bitchez??? ;-)

This is the new wave of the move towards serfdom, bitchez.

I'm sure the US taxpayers are still on the dole for billions that were given to that bank for just that one property alone after the financial collapse 8 years ago.  They were probably gifted hundreds of millions on it back then, and now own it for 100 bucks. 

Banksters aren't hurtin'....

They're still taking over

espirit's picture

Fire Sale, in Ahem, 3..2..1...

NoDecaf's picture

Put some pokemons in there with coupon prizes. The zombies will come back.

El Oregonian's picture

Hey, lots of empty space for those Democratic Campaign Headquarters seeking prime location to be able to ply their wares on gullible, brain-challenged lemmings seeking to be in the "In Crowd" of those awesome losers who just got torched during the last election-cycle...

wee-weed up's picture

But I thought Obozo said his last 8 years of leading the economy meant things were just fine. He didn't lie (AGAIN!) did he?

Motasaurus's picture

Damn it why did no one tell me? 

I've always wanted to build my very own castle but getting the land is a pain in the ass. For $100 not only do you get the land but much of the infrastructure already in place. Just got to beef up the outer walls and retrofit the interior and BAM - instant personal castle.  

glenlloyd's picture

I cant stand to go to malls, it's just frickin joke to go there. I look at the stores and wonder how in the world they can sell enough to make rent?

The last time I was there was for the theater and I wouldn't have gone at all except a friend wanted to see the show. The mall though was just an exercise is watching goof balls stuff their faces or buy crap they don't need.

Malls are crap, it'll be a godsend when they all go belly up.

Countrybunkererd's picture

So, WHAT EXACTLY are these assets the FED holds now?  Hang the hell on guys this might get slightly bumpy!

SoDamnMad's picture

Yes,and they can put 20 branch offices in each of those malls to scoop up all the cash stuffed in everyone's pockets

crazzziecanuck's picture

I agree.  I suspect the bank sold it to itself so it could book the financial loss in a tax dodge.

azusgm's picture

No. It was a foreclosure auction with no bidders. WFC held the note so took the collateral. The actual selling price was $0.

jaxville's picture

  You hit the nail square on the head. 

     The huge write down was paid for by smaller investors in losses and taxpayers in bailouts.

zhandax's picture

You are way ahead of the curve. Probably 8 years from now, when the Donald is handing the keys to the WH over, will the lawyers allow them to recognize that loss.

Son of Loki's picture

Legacy, Bithces!

 

No wonder the media was fawning all over Osama bin Bama this week. He's 8 years have been really "unique."

More cops killed, more bankruptcies, more war losses, more poverty amongst blacks, more inner city rot, more mall bankruptcies, and...well, you get the gist.

jeff montanye's picture

yes the gist is apparent but still:

more citizens prosecuted under the heinous wilson espionage act than all other presidents combined

more citizens openly executed by presidential order without trial than any other president

more debt incurred than all other presidents combined

fewer banksters prosecuted than under either bush

least transparent administration ever

signature health care reform so bad it wasn't put into place until after he left office (if then)

such a deft politician he lost 900+ state legislature seats, 12 governors, 69 House seats, and 13 Senate seats

 

hound dog vigilante's picture

 

Yet CRE & the stawk market are still near all-time highs... go figure.

 

Gee, ya think there might be some manipulation & shenanigans going on?

 

Someone explain to me how malls/strip malls/office buildings/business parks become graveyards yet CRE/REIT values NEVER go down...

 

 

 

PlayMoney's picture

Yeller will give Wells $200 mil and park it in her mortgage back security cave. Then Wells parks that cash back at the Fed and gets 6% for excess reserves. Childs play in the big 5 banking world.

markpower49's picture

Most malls die because blacks start going there and bring their usual dysfunction and crime. Is this the case here?

Escrava Isaura's picture

Nothing to worry. Trump will make it great again. Then, that investment will double.

I have total confidence on this statement.

 

tarabel's picture

 

 

So it will be worth two hundred dollars?

Okay, I know what you're saying but I couldn't resist.

Escrava Isaura's picture

Exactly.

$200 and Trump can call it great again.

 

peddling-fiction's picture

Escrava,

What did your Ford engine VIN number start with?

A number 3 ?

Curiously_Crazy's picture

Heh.. The Blokes been around for ages and never gives a fuck about what he says. Gotta give credit for that..

Something along the lines of "I may not agree with what you say but will fight to the death for your right to say it" (paraphrasing) comes to mind.

He comes up with some good stuff every now and again.

Arrowflinger's picture

Wells Fargo bought it? Sure the check was good?

 

tarabel's picture

 

 

Whose account did they use this time?

mkkby's picture

Bullshit story and fucktard comments are clueless.   The bank bid $143 million PLUS 100.  That's how much someone woud have to pay to take it. 

Do any of you idiots think that much vacant land even in detroit is worth only 100?

TGDavis's picture

When does Wells have to show the $143 million loss on their balance sheet?

Singelguy's picture

When they actually sell it to a third party.

skirmish's picture

So to be more accurate. $143 million loan balance plus $100 for a property valued at $11 million. 

Wells Fargo paid $132 million and $100 over the valualtion price... 

 

 

orez65's picture

No problem.

Wells Fargo, a Too Big To Fail Criminal, will sell the mall's mortgage to the Federal Reserve.

Problem solved.

 

malek's picture

You forgot the step where Wells marks it to $150 million.

rtb61's picture

Likely Wells Fargo was more confindent in recovering more of thoses losses itself, rather than hoping for a big bid. So it's bid was it's debt plus $100 dollars. The is a new design push to include residential accomadation in shopping malls ie the space above the roof. So ground floor and basement as parking. next two floors as retail and office accomdation and however many more floors as condominiums. (it provides extra customers for the mall and really convenient for residents).

Think of all that space above the carparks in a good central location, although technically up in the air, it still represents really valuable real estate. Likely a lot of malls will be seeking to add residential accomadation into the mix. good example http://www.hicondos.com/hawaii-Condos/Park-Lane-Ala-Moana.asp

Offthebeach's picture

Lots of people moving to Pittsburgh?

Maybe a giant Mosque, FEMA camp, assembly plant for STEELERS! brand (fk yeah!) mobility scooters assembled by Mexicans ( is golf cart? Is farm wagon? No, is one gringo!)

rtb61's picture

Likely Wells Fargo was more confindent in recovering more of thoses losses itself, rather than hoping for a big bid. So it's bid was it's debt plus $100 dollars. The is a new design push to include residential accomadation in shopping malls ie the space above the roof. So ground floor and basement as parking. next two floors as retail and office accomdation and however many more floors as condominiums. (it provides extra customers for the mall and really convenient for residents).

Think of all that space above the carparks in a good central location, although technically up in the air, it still represents really valuable real estate. Likely a lot of malls will be seeking to add residential accomadation into the mix. good example http://www.hicondos.com/hawaii-Condos/Park-Lane-Ala-Moana.asp

Doug's picture

They can call it "Boondoggle Village".

Doug's picture

Correct.  The article summary wasn't very clear about that.  My guess is the property is losing money at 55% occupancy and the prospects for getting it up to 80% or better ain't looking too hot.  It wouldn't surprise me if there are other new shopping malls planned or under development in the area.  If actual crimes are being committed, THAT's where you'll need to look.

runnymede's picture

Fiat money brings misallocation of resources. 

August 15, 1971

DirtySanchez's picture

More to this story.
Fake news.

Ahmeexnal's picture

I'd buy that for a dollar!

yogibear's picture

But then the county amd municipality will crush you financially with the property taxes and local code violations.

Better to let it go back to nature than to let the government own you. 

jeff montanye's picture

let some israeli art students work with it a while.

Stalefarts's picture

All the talk about how Sears has so much value due to its CRE holdings, but I see brick and mortar retail as an obsolete dinosaur. No one wants these spaces anymore and once amazon has the drones going its game over for 90% of bricks and mortar