The Eastridge center was in default before a big deal for the San Jose mall
SAN JOSE — A major San Jose mall that a few weeks ago landed new investment to revamp its ownership structure had to grapple with a delinquent mall financing loan just before the recent deal.
In August, the main owner of Eastridge Center announced that it had attracted a new investor in a deal set to help revamp its finances and reposition its tenant mix.
But two months before the deal was disclosed, the mall disclosed that an earlier $150 million loan was in default, according to documents filed June 1 with the Santa Clara County Recorder’s Office.
On the same day in January 2016 when a subsidiary of Pacific Retail Capital Partners paid $225 million to buy Eastridge Center, the Los Angeles branch of Bank of China granted the $150 million mortgage to Pacific Retail Capital.
Pacific Retail Capital revealed on August 30 that Silver Eagle Capital Partners had invested in the mall.
Silver Eagle Capital’s investment was expected to help extend the maturity of the loan that currently finances Eastridge Center, according to the co-owners of the large mall.
But before the disclosure of the deal with Silver Eagle, loan documents revealed some difficulties with the 2016 loan from the Bank of China.
Existing funding was “delinquent” and “overdue,” according to county documents.
The disclosure was in a modification of the original loan. “The Trustee (Borrower Pacific Retail) requested from the Lender that the loan be amended to, among other provisions, extend the maturity date of the loan, adjust the method of calculating the interest rate and establish a payment plan for the overdue and overdue debts.”
Pacific Retail Capital Partners and Silver Eagle Capital Partners declined to discuss lending difficulties.
“We are not free to share specific partnership details at this time,” said a media relations representative for Eastridge Center and its ownership group.
Despite the disturbing revelations in the loan documents, Eastridge Center’s prospects are promising, even beyond the potential offered by Silver Eagle Capital Partners’ investment.
The new investment group envisions a higher and more robust profile for the mall.
“I see Eastridge Center emerging as the destination for relaxation, entertainment and quality dining for families,” said Steven Dai, founding partner of Silver Eagle Capital.
Despite the loss of major retailers such as Barnes & Noble and Sears, the Eastridge Mall has added big name merchants such as 24 Hour Fitness and H&M.
Separately, a bustling Vietnamese indoor market could sprout in the closed former Sears store in East San Jose’s Eastridge Center mall now that a real estate entrepreneur has purchased the cavernous building.
Intelli, a subsidiary headed by Do Van Tron, a San Jose-based business and real estate manager, bought the former Sears department store. Tron plans to develop a new retail, restaurant and food complex in the space. It is not yet known when the market could open.
“I plan on doing a covered market,” Tron said. “It would be like the covered markets in Vietnam.”
Intelli paid $24.8 million for the property, which is at 2180 Eastridge Loop in San Jose, according to county property records.
“The Vietnamese market is going to be an experiment,” said David Taxin, partner at Meacham/Oppenheimer, a commercial real estate firm. “Eastridge will benefit from significant foot traffic thanks to the Vietnamese market.”