The going rate to purchase a shopping mall just took a major nosedive.
A Pittsburgh-area mall that was foreclosed on after its owners failed to repay $143 million was auctioned for $100 on Wednesday.
Wells Fargo, the same bank that foreclosed on the mall in November 2015, shelled out a single Benjamin Franklin bill for the 1.1 million-sq.-ft. Galleria at Pittsburgh Mills, located in Frazer Township.
After mall owners Pittsburgh Mills Limited Partnership defaulted on the loan, lender Wells Fargo — which also became the mall’s trustee following the foreclosure — swooped in to snap up the facility.
The mall opened in 2005 and was once worth $190 million but recently was appraised at just $11 million, according to the Post-Gazette.
Debt-saddled and likely under the same pressures as many struggling malls across the country,Galleria at Pittsburgh Mills is now slightly more than half occupied. And Wells Fargo has likely stepped in to buy the facility from itself in an attempt to revive it or sell it at a more respectable price.
The transaction was a consensual foreclosure, so there were no other bidders for the mall, which is anchored by department store chain Macy’s and Dick’s Sporting Goods. (Macy’s announced earlier this month that it would lay off more than 10,000 employees by this spring and also forge ahead with plans to close 100 stores over the next few years. Meanwhile, Dick’s Sporting Goods continues to dominate the faltering sporting goods space following the demise last year of its major competitor, Sports Authority.)
Shopping malls — and their tenants — have been under heightened pressure during the past few years as e-commerce-only players such as Amazon and eBay have drawn a large share of consumers at the expense of brick-and-mortar. Consumer shifts toward experiential spending have also added to the weight.