This week we got the word…three of our major shopping and retail centers are going to be either auctioned off for foreclosure, or are scheduled to be foreclosed on shortly. All three centers have, or had, great tenants…and then the market took the nose-dive.
The former Gottschalk center on Hilltop Drive is scheduled for auction on August 20th; the partially filled center on Hilltop that is home to Trader Joe’s is going into foreclosure; and the new complex on Hilltop housing, among other tenants, Chuck E Cheese…is scheduled for foreclosure, or at least that is what we are being told.
In each of these situations, we are told the existing tenants will be able to continue…but in a foreclosure action, leases may become an issue. We hope not, for these are good tenants, and we are just getting real use to having a Trader Joe’s convenient to the North State.
I was asked,”why is this happening”…and no good answer….just that we are in an economic downturn and when business drops off and tenants cannot continue to pay their rents…the lenders still need to be paid. In each of these cases, the lenders, whomever they are, are probably taking pretty good hits, also…for the two newer projects had heavy financing at higher interest rates. These were built when the future of Redding, and California, and the Nation, for that matter….was in a definite growth mode. From a 10% growth to a 2% national growth, things will change dramatically.
Well, keep shopping locally, and hopefully we will not see more of this….it is about all we can do, and then hope for the best. Stay tuned.