A Pacific Retail Capital Partners-led venture has sold the Eastridge Mall in San Jose, Calif., for $135 million, a price that results in a 5.48 percent capitalization rate, based on the property's in-place net operating income.

The venture sold the property to an investor group said to be affiliated with United Construction & Development Group of New York. The sale first was reported by the San Jose Mercury News.

Pacific Retail, a Los Angeles investment manager that long has specialized in taking tired malls and redeveloping them, had purchased the 1.2 million-square-foot mall, of which 426,000 sf is separately owned, in 2016 for $225 million. At the time, it had partnered with Silverpeak Real Estate Partners. It had acquired the property from what then was GGP Inc. The property in 2013 had generated $14.88 million of NOI, according to servicer data compiled by Trepp Inc.

As part of its purchase, the Pacific Retail venture had lined up $150 million of financing from Bank of China. Nearly two years ago, a new capital partner, Silver Eagle Capital Partners of Las Vegas, was brought in. At the same time, the property's former Sears location, which totaled 260,100 sf, was sold for $24.8 million, and converted to an Asian banquet hall and market. Other parcels were sold for another $17.9 million.

That had allowed the Pacific Retail venture to pay down the Bank of China loan to $118 million. The loan has been fully retired with proceeds from the property's sale.

Since buying the 52-year-old property in 2016, the venture has brought in a Round1 Bowling & Amusement venue, a roller-skating rink and added to its retailer roster 24-Hour Fitness and H&M.

Original Story HERE