Big San Jose regional mall is bought by real estate group from Texas and NYC


Interior of Eastridge Center shopping mall in San Jose, 2022.

SAN JOSE — Eastridge Center in San Jose, one of the Bay Area’s best-known shopping and restaurant centers, has landed a Texas-based buyer in a deal that tops $100 million, real estate records show.

Most of the East San Jose shopping center has been bought for $135 million by a group with offices in Texas and New York City, documents filed on Jan. 19 with the Santa Clara County Recorder’s Office show.

A real estate group headed up by business executive Jiashu Xu, acting through an affiliate, bought the shopping center at 2200 Eastridge Loop. The affiliate is based at a Houston address that is one of the offices for Xu, a developer active in New York City real estate.

The mall’s seller was an affiliate operating as GS Pacific ER. Silver Eagle Capital Partners and Pacific Retail Capital Partners control the affiliate.

The new owners landed $98 million in financing from Bank of China Los Angeles Branch at the time of the purchase, county records show.

The purchase includes the vast majority of the mall at 2190 and 2200 Eastridge Loop, a parcel that consists of all of the stores in the main section of the regional center. The buyer also gained ownership of smaller properties adjacent to or near Eastridge Center, including a parcel at 2010 Tully Road.

GS Pacific, the selling entity, paid $225 million for Eastridge Center in 2016, county documents show.

Over the years following its purchase, GS Pacific sold off seven parcels next to the mall that the real estate firm had bought as part of the original purchase of the vast retail and restaurant complex. GS Pacific sold these parcels for a cumulative $42.7 million.

Measured that way, the selling group was paid a combined $177.7 million through its sales of the same properties that it bought for $225 million in 2016. That would be a 21% decline in the value of what it paid in 2016.

But measured another way, the deal suggests the value of Eastridge Center is growing.

The six parcels bought in this month’s transaction have a combined value of $90.5 million, County Assessor’s Office records show. This suggests that the Jiashu Xu-led group paid 49% more this month than the six parcels were worth in early 2023.

In recent years, the sellers launched a massive renovation of Eastridge Center, including upgrades and a new tenant mix. These kinds of activities can increase the value of a property, even a retail center in a post-coronavirus pandemic world.

In August, Eastridge Center’s principal owner announced that it had attracted a new investor in a deal poised to help revamp its finances and reposition its tenant mix.

But two months before that deal was disclosed, the shopping center revealed that a prior loan of $150 million was in default, according to documents filed on June 1 with the Santa Clara County Recorder’s Office.

On the same day in January 2016 when an affiliate of Pacific Retail Capital Partners paid $225 million to buy Eastridge Center, Bank of China’s Los Angeles Branch provided the $150 million mortgage to Pacific Retail Capital.

Loan papers revealed some difficulties with the 2016 financing provided by the Bank of China.

The existing financing was “delinquent” and “past due,” the county documents state.

The disclosure was in a modification of the original loan. “The trustor (borrower Pacific Retail) has requested from the lender that the loan be modified to, among other provisions, extend the maturity date of the loan, adjust how the interest rate is calculated and establish a payment plan for past due and delinquent debt.”

The just-completed purchase creates an opportunity for a new ownership group to take control of the mall’s operations and chart a future course for the shopping center.

Macy’s, JCPenney, Round1 Bowling & Amusement, AMC Eastridge 15 movies,   Aloha Fun Center roller skating rink, Forever 21 and H&M are among the primary merchants at Eastridge Center, the mall’s directory shows.



This article was originally published by a www.mercurynews.com . Read the Original article here. .