Daily Hampshire Gazette – Hampshire Mall sold for fraction of estimated value, $7 million

HADLEY – The Hampshire Mall, a major commercial property on Route 9 since it opened in 1978, was sold at a foreclosure auction Thursday for $7 million.

The buyers were Deutsche Bank Trust Co. Americas and Wells Fargo Commercial Mortgage Securities Inc., which hold the mortgage on the property. The bank foreclosed on the mall after owner The Pyramid Companies defaulted on its mortgage. Pyramid, based in Syracuse, New York, also owns Holyoke Mall and several other New York shopping centers.

Attorney Steven Weiss of the Springfield law firm Shatz, Schwartz and Fentin submitted a bid on behalf of the bank. He declined to comment on the buyer’s possible plans for the mall.

The sale price was well below the mall’s current assessed value of $19.2 million, which is about half of the $37.55 million appraised value from fiscal year 2010. Because malls do not sell often, the estimate is based on other factors, including occupancy rates and rents charged by tenants.

While the auction was taking place outside the mall near JC Penney and some of the 25 spectators sought a few shady spots in the parking lot, auctioneer Corey Fisher of Aaron Posnik & Co. undertook the arduous task of reading through the entire foreclosure appeal. He was applauded for this 10-minute marathon.

Terms of sale for the 435,000 square foot property on 46.52 acres were a $100,000 deposit and then 10% of the purchase price within five days, with the balance plus a 5% commission to the auctioneer due within 30 days.

Before opening the bidding process, Fisher pointed out that while taxes on the property were current, infrastructure, sewer and water fees totaling $9,279.90 were owed.

The opening bid was $7 million. When he received no response, Fisher reduced the bid to $6 million. When no one responded this time, he accepted a bid of $2 million, but told the bidder, “That’s not enough.”

A handful of bidders then drove the price back up to $7 million, where it remained. Personal property, mainly furniture and furnishings, also went to the bank for $25,000.

Shardool Parmar, whose Pioneer Valley Hotel Group owns three hotels in Hadley and is building another, was one of the interested bidders. He said the mall was “a great piece of real estate,” but added that smaller malls are difficult to operate and sell.

He indicated that the bank might be interested in negotiating a sale with individual potential buyers.

The mall’s grounds are home to most of the stores in the complex, with the exception of Target, which purchased its store and the land it stands on from Pyramid in 2003.

Major stores include JC Penney, Dick’s Sporting Goods and PetSmart, as well as Jo-Ann Fabrics. The Cinemark movie theater has also been remodeled and expanded over time.

Many of the mall’s tenants are in the entertainment and lifestyle space, including Planet Fitness, Interskate 91, FunHub Action Park, Pinz, All in Adventures Escape Room, LaserBlast and Elite Tae Kwon Do. Cafe Square also has a few restaurants, such as Cheesy Street Grille, Latino’s Cuisine, Arizona Pizza and Tutti Frutti, and just a handful of home decor stores, such as Valley Artisans, X9 Games and Memorable Jewelry.

Messages seeking comment were left with mall management and the Pyramid Companies on Thursday.

James Pentland can be reached at [email protected].