SAN JOSE — A big San Jose shopping mall that a few weeks ago landed new investments to revamp its ownership structure had to wrestle with a loan delinquency for the mall’s financing just ahead of the recent agreement.
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.
Pacific Retail Capital revealed on Aug. 30 that Silver Eagle Capital Partners had made an investment in the shopping center. The investment by Silver Eagle Capital was expected to help extend the maturity of the loan that currently finances Eastridge Center, according to the co-owners of the big retail mall.
But prior to the disclosure of the deal with Silver Eagle, loan papers revealed some difficulties with the 2016 loan 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.”
Pacific Retail Capital Partners and Silver Eagle Capital Partners didn’t wish to discuss the loan difficulties when contacted by the Bay Area News Group.
“We are not at liberty to share specific details of the partnership at this time,” a media relations representative for Eastridge Center and its ownership group stated.
Despite the disturbing revelations in the loan papers, Eastridge Center’s outlook is promising, even beyond the potential that is being offered through the investment from Silver Eagle Capital Partners.
The new investment group envisions a higher and more robust profile for the mall.
“I see Eastridge Center establishing itself as the destination for family-friendly relaxation, entertainment, and quality dining,” said Steven Dai, founding partner of Silver Eagle Capital.
Despite losing major retailers such as Barnes & Noble and Sears, Eastridge mall has added high-profile merchants such as 24 Hour Fitness and H&M.
Separately, a lively Vietnamese indoor market could sprout inside the shuttered former Sears store at East San Jose’s Eastridge Center shopping mall now that a real estate entrepreneur has bought the cavernous building.
Intelli, an affiliate headed up by Do Van Tron, a San Jose-based business and real estate executive, has bought the old Sears department store. Tron is planning to develop a new retail, restaurant and food complex in the space. It is not clear yet when the market might open.
“I plan to do an indoor market,” Tron said. “It would be like the indoor markets in Vietnam.”
Intelli paid $24.8 million for the property, which is at 2180 Eastridge Loop in San Jose, according county property records.
“The Vietnamese market is going to be an experience,” said David Taxin, a partner with Meacham/Oppenheimer, a commercial real estate firm. “Eastridge will benefit from some serious foot traffic as a result of the Vietnamese Market.”
