Sterling Organization purchased Plaza Mexico, an approximately 400,000 square foot mall in Lynwood, after the mall filed for bankruptcy in 2021.
The West Palm Beach-based investment firm paid $165 million for the property at a bankruptcy auction, the company said in a statement last week. Sterling secured a $106 million loan from Rialto Capital Management as part of its purchase, public ownership records file with the LA County show.
The former owner of Plaza Mexico, an entity linked to M+D Properties, filed for bankruptcy in April 2021, after defaulting on $106 million in senior loans and $14 million in mezzanine debt, court records show. .
The mall opened in 2002 and was once a hub for EB-5 investments, a visa program that allows foreign investors to obtain a green card in exchange for investing in real estate projects. The program shut down in 2021 after lawmakers failed to agree on key features but reauthorized it earlier this year.
M+D Properties, led by Donald and Min Chae, has struggled to hold on to its commercial properties in recent months. The company recently put its 600,000 square foot mixed-use retail complex called The Source in Buena Park up for sale – a property that includes an unfinished hotel. This property also relied on EB-5 financing.
Sterling plans to renovate and lease vacant space in Plaza Mexico, which is already home to a number of fast food chains and grocery stores. Planet Fitness, Curacao, Skechers and Taco Bell are leasing space in the mall, according to Sterling. About 16% of the property is currently vacant, according to Sterling’s website.
The property was recently valued at $170 million in October, showing its decline in value since then. However, the deal is bigger than Los Angeles’ best retail deal of 2021, which was Onni Group’s $136 million purchase of the 1 million square foot Burbank Town Center. At $409 per square foot, it was also a more expensive transaction per foot – most major retail transactions last year were under $200 per foot.
With Plaza Mexico, Sterling now owns seven commercial properties in Los Angeles, from Westlake Village to Beverly Hills to Huntington Park.