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Midlothian shopping center headed for foreclosure

The Pocono Crossing shopping center takes up 180,000 square feet at 10400 Midlothian Turnpike. (Kieran McQuilkin)

Behind on its mortgage and defaulting on a $15 million loan, a large-scale shopping center in Chesterfield County has a date with the auction block next month.

Lenders of Pocono Crossing at 10310 and 10400 Midlothian Turnpike are pushing for a foreclosure auction on the 180,000-square-foot center, with an auction set for Dec. 13 on the front steps of the Chesterfield County Circuit Court.

Built in 1988, Pocono Crossing is owned by an LLC tied to Stoltz Management of Pennsylvania, which also handles leasing at the shopping center. It paid about $20.6 million for the property’s two parcels in July 2006, county records show, near the peak of the pre-recession boom. The company took out a loan on the property that same year for $16.7 million, according to commercial loan tracking firm Trepp.

The open air center is roughly 89 percent occupied and is home to Burlington Coat Factory, Chuck E. Cheese’s, Tuesday Morning, and New Hong Kong Buffet, among other tenants. It sits on nearly 18 acres and was most recently assessed by the county at around $15.7 million.

As of Nov. 1, the owner’s loan had a balance of around $15.6 million, and the borrower has “expressed difficulty in paying off the loan,” the Trepp report states.

Dan Drake of Stoltz did not return multiple calls for comment Monday afternoon.

The attempted foreclosure comes after the loan secured by the property was transferred to special servicer LNR Partners in July, according to Trepp.

Special servicers are hired by commercial noteholders to manage loans when a borrower may be at risk of falling behind on payments. The loan has since gone into default, according to the legal notice advertising the forthcoming auction.

Since its purchase of Pocono Crossing, the ownership group posted peak revenue of nearly $2.1 million and expenses of $394,000 in 2008, the Trepp report states.

However, that rent roll began to trail off after 2008, with the firm posting roughly $1.8 million in revenue in 2015 and about $352,000 in expenses, Trepp found. The most recent available figures show the shopping center collected nearly $480,000 in revenue between January and March of this year.

The property was most recently assessed at $5.7 million, according to county records.

The looming auction, announced in a legal notice, does not include two outparcels that are owned by Greensboro-based Kickback Jacks restaurant and the SunTrust Bank branch that share a parking lot in the shopping center.

Article source: http://richmondbizsense.com/2016/11/29/midlothian-shopping-center-headed-for-foreclosure/

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