Man how times have changed. Retail Traffic reported on the construction of the South Coast Home Furnishings Centre in August 2005. The project was part of a broader trend of developers creating malls heavy on furniture retailers that were attempting to make the most of the housing boom--then in full swing.
Needless to say, things have deteriorated since then. The original developers sold the mall in August 2007 for $98 million. It's new owners, however, didn't make out very well.
The South Coast Home Furnishings Centre in Costa Mesa — conceived as a one-stop outlet for home remodelers — has lost customers, tenants and finally ended up in receivership after rents failed to cover loan payments and operating expenses. The 20-acre property off the I-405, which sold for $98 million in the summer of 2007, went up for sale for $65 million in September, just as the economy began to implode.
By December, the receiver and the lender concurred that a $35 million offer was the best they could get for the 300,000-square-foot center.
That's a 64% drop in value in a 1.5-year period. If the sale falls through, values could fall further, the receiver argued in court papers.
The Home Furnishings Centre had 32 tenants, filling almost all of the available space, when it sold to Dale A. Williams and South Coast Home Furnishing LLC in August 2007. Williams put $18 million down and borrowed $84 million to cover the balance of the purchase price.
As of December this year, tenants had fled, including the anchor: bankrupt Wickes Furniture. According to court records, just 18 tenants remained and 34% of the space was vacant.
(Spotted at Calculated Risk)