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Four Malls Enter Receivership

NEW YORK CITY-Locally based Lightstone Group has turned over control of four regional malls to Jones Lang LaSalle Retail.

By Paul Bubny | Updated on January 21, 2009

NEW YORK CITY-Four regional malls owned by the locally based Lightstone Group have been placed into receivership after a mortgage on the properties fell into delinquency. Jones Lang LaSalle Retail has been named the receiver, and will be responsible for leasing, managing and conducting due diligence to determine the best course of action for the properties.

The four malls are the 335,000-square-foot Bradley Square in Cleveland, TN; the 556,000-square-foot Martinsburg Mall in Martinsburg, WV; Shenango Valley Mall, a 509,000-square-foot property in Hermitage, PA; and the 478,000-square-foot Mount Berry Square in Rome, GA. They comprise four of the five mall properties Lightstone acquired for $120 million from Pennsylvania Real Estate Investment Trust in 2004. The fifth mall property in the PREIT deal–the West Manchester Mall in York, PA–was not included in the mortgage.

According to a release from Fitch Ratings, the $73.6-million loan on the malls was transferred to special servicing last October “due to imminent default.” The loans were given through JPMorgan Chase Commercial Mortgage Securities Trust in 2006. By the end of Q1 2008, the debt service coverage ration on the four malls had declined to 0.95, according to Fitch.

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