A Plainfield shopping center that went into receivership last year after owners fell behind on a loan agreement is back under control of its Memphis, Tennessee-based ownership group.
Poag Shopping Centers earlier this month squared away its legal dispute over The Shops at Perry Crossing, allowing the firm to take back the keys to the property.
Poag and former partner Blue Vista Capital Management LLC bought the shopping center (then known as Metropolis) in 2014 through a $35 million loan from Pacific Western Bank.
Poag Shopping Centers CEO Josh Poag said Monday the firm regained control of the property in mid-April after securing a new loan from a separate financial institution that allowed the Pacific Western loan to be paid off.
The property went into receivership last October and was temporarily managed by Syracuse, New York-based Spinoso Real Estate Group.
“Now we have a new loan, so we’re back in business and we’re trying to ramp up operations,” Poag said of the company’s renewed presence at the Plainfield shopping center. “Spinoso did a really good job when they were holding the property. They actually were able to drum up some new tenant interest that we’re following through on.”
Poag said at least two deals are in negotiation to fill some of the space left vacant by the closures of tenants like Claddaugh Irish Pub, Stacked Pickle and Jos. A. Bank, but he didn’t specify which of those spaces were expected to be filled.
The shopping center is about 85% occupied, with most remaining tenants having reopened since last year’s pandemic stay-at-home orders led to widespread shutdowns.
The bank filed a foreclosure suit against the holding company in Hendricks County Superior Court 2 last June after it missed a May deadline to pay off the loan’s $30 million balance and talks between the firms stalled.
The new loan was secured through Los Angeles-based Parkview Financial. Terms of the loan have not been made public.
Poag said he understood Pacific Western’s decision to move ahead with filing for default on his firm’s loan last year. He said the new loan in place—secured weeks before the property was expected to go up for auction—accomplished what the bank was looking for: a return of its investment.
“At the end of the day, they got paid off 100%, so they’re happy,” he said. “And we’re happy, so it ends up in a place where everybody is satisfied. I can’t say it was a waste of time because there was their right—the term of the loan was due.
“As a borrower, you can’t just unilaterally say, ‘OK, we need a one-year extension’ … that was really up to PacWest’s internal decisions.”
Poag Shopping Centers had been trying to sell the 16-year-old lifestyle center until COVID-19 began affecting the investment market in March. The 600,200-square-foot mall is the 10th largest shopping center in the Indianapolis area in terms of square footage.
In the short-term, Poag said the plan for Perry Crossing is to “lease the heck out of the property” and keep it stable. Long-term, however, there are a few options on the table.
They include securing equity or a loan to buy out the ownership stakes of two partners on the property, or to put the property back on the market. He did not identify the other partners in the property.
“I know what I’m leaning towards,” Poag said. “I would rather be the long-term holder of Perry Crossing. We have two other partners in the deal and we have to do what’s right for the property and what’s right for our partnership. It’s always a dance and balance.”
Poag said he is also considering further investment in the Indianapolis market, but clarified there’s no immediate plans to acquire additional shopping centers locally.
Before the Great Recession, Poag was best known for its development of new shopping centers, but now it typically buys properties and flips them for a profit after a few years. It operates 16 centers across the United States.
Perry Crossing, which underwent an $11.1 million renovation and rebranding in 2015, also went into receivership in 2008.
That situation was preceded by major losses and extensive legal troubles suffered by its then-owner and developer, Premier Properties USA Inc.
Premier, which spent $160 million to develop the mall, dissolved in 2009—the same year its founder, Christopher P. White, was sentenced to one year on home detention and three years of probation for writing a bad $500,000 check while trying to save his struggling real estate development firm.
In 2010, two Israel-based firms took the shopping center under contract, with plans to pay $52 million, but the acquisition failed to go through.
Additional development has occurred since the property was acquired by Poag, with a Marriott-brand hotel now under construction and another hotel in the works. Both properties will be owned by Georgia-based Peachtree Hotel Group.