LOVELAND — The Promenade Shops at Centerra shopping district has been issued a foreclosure demand worth $84 million, marking the second major retail center in Northern Colorado to fail to keep up on debt payments amid the pandemic.
The 500-square-foot property is in default on the variable-interest loan, which was issued in February 2018 by the American arm of French investment bank Natixis S.A., according to foreclosure notices posted to the Larimer County Public Trustee’s site Friday morning.
The listed amount due of $84 million is exactly the same as the original loan amount issued, according to county records. The loan is currently held by a subsidiary of M&T Bank Corp.
An auction is tentatively scheduled for June 30.
This marks the second time the shopping district has faced foreclosure. It was placed up for auction in 2009 and was acquired by a subsidiary of former lender KeyBank for $85 million. New York City-based real estate private equity group DRA Advisors LLC then bought the property for $75.5 million several months later and are the current owners.
DRA has been trying to sell the center since last May. A listing brochure issued by Chicago-based commercial real estate broker Jones Lang LaSalle Inc. at the time said the Promenade had an 88.3% occupancy rate. It lists anchors Dicks Sporting Goods Inc. and movie theater Metrolux under lease for at least five more years as of 2021.
The Macy’s Inc. store in the district is owned by the retailer and not subject to foreclosure.
McWhinney developed the retail district in 2004 with Memphis-based developer Poag & McEwen. McWhinney later alleged that Poag had taken fraudulent loans against the Promenade Shops and fraudulently transferred funds away from the project. A state judge issued a $42 million judgment for McWhinney several years ago, and a federal civil case between the two groups is ongoing.
Representatives for DRA and JLL did not immediately respond to a request for comment Friday morning.
The Promenade Shops is the third major retail center along the Front Range to face foreclosure in recent months.
Fort Collins’ Foothills defaulted on the remaining $46.59 million out of its original $150 million construction loan late last year. The property had been listed for sale for months prior, and McWhinney was approved last week to begin negotiations on acquiring it.
The Belmar Shopping Center in Lakewood is also facing a foreclosure demand for $108.8 million on a $111 million loan.
In an interview Friday afternoon, McWhinney president Ray Pittman said the Promenade Shops wasn’t immune from the same pressures on retail that are causing the rest of that industry pain. The company still has an outside interest in seeing that property thrive because it’s a large part of the master-planned community model that it is building, he said.
He wouldn’t say specifically if McWhinney had an interest in acquiring the property, and said the company is monitoring the situation.
“We’re outside observers like everybody else right now, other than it’s in the heart of our community, so maybe we’re a little bit keener observer than others,” he said. “But we’re an outside observer right now. We’re watching what’s happening.”