There’s a sale at the Saks Fifth Avenue store in Beverly Hills — but not the usual kind.
The property’s lender is planning to sell the retail property at 9600 Wilshire Boulevard at a foreclosure auction, Commercial Observer reported.
The action follows lender Wilmington Trust’s lawsuit alleging Saks Fifth Avenue’s parent company, Hudson’s Bay and Simon Property Group, missed mortgage payments on the property.
A spokesperson for the joint venture told CO it was “disappointed that in the context of a global health crisis the lenders would choose litigation over cooperation,” but said it “remains committed to resolving issues with the lenders in an amicable way.”
The operation of the store will not be affected by the foreclosure proceedings, according to a spokesperson for Saks Fifth Avenue. The department store’s lease runs through July 2035.
The property’s financing is part of an $846.2 million loan on a portfolio of Saks Fifth Avenue and Lord & Taylor properties nationwide, provided in 2015 by JPMorgan Chase, Bank of America, and Column Financial. The CMBS loan was transferred to special servicing in the first half of 2020.
The Saks building spans 156,267 square feet and is one of the largest privately owned sites in Beverly Hills’ Golden Triangle, Los Angeles’ premier shopping district. The brick-and-mortar retail industry has been devastated by the pandemic, and the sector’s struggles can be seen in the performance of securitized commercial loans. As of June, around 6.1 percent of all CMBS loans on L.A. properties were delinquent.
[CO] — Dennis Lynch