Finance  ·  CMBS

Beverly Hills Saks Fifth Building to Be Sold at Foreclosure: Updated

The property offers 156,300 square feet near the iconic shopping district Rodeo Drive


The Beverly Hills Saks Fifth Avenue department store at 9600 Wilshire Boulevard is set to be sold at foreclosure, Commercial Observer has learned.

Wilmington Trust filed a lawsuit earlier this year against the property owners a joint venture of Hudson’s Bay, which is Saks Fifth’s parent company, and Simon Property Group for missed mortgage payments. Marketing materials obtained by CO show Wilmington tapped Eastdil Secured to solicit offers for the asset. 

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In a statement sent to CO, a spokesperson for the joint venture (HBS) said “this simply a next step by the lenders to exert pressure on (the owner of the properties).”

“HBS is disappointed that in the context of a global health crisis the lenders would choose litigation over cooperation,” the statement read. “With that said, HBS remains committed to resolving issues with the lenders in an amicable way.”

Eastdil did not return several attempts for comment. Wilmington’s attorneys did not return requests for comment.

In 2015, JPMorgan Chase (JPM), Bank of America (BAC) and Column Financial provided a $846.2 million loan for dozens of Saks Fifth and Lord & Taylor properties around the country, including the Beverly Hills location. It is subject to a Saks Fifth master lease, which lasts until July 2035. 

The building includes 156,267 square feet of rentable space, near the famed Rodeo Drive shopping district, which is home to premier luxury brands that pay some of the highest retail rents in the country. The Saks Fifth building is one of the largest privately owned sites in the Beverly Hills Golden Triangle. A spokesperson for Saks Fifth Avenue told CO that the foreclosure proceedings will not impact their stores or operations.

Hudson’s Bay went private early in the year, and Situs, a special servicer for the $846 million loan, accused the company of engaging in a corporate “shell game” that diluted the creditworthiness of the loan. Hudson’s Bay has denied those allegations.

Many CMBS loans have been in hot water due to the struggles over coronavirus shutdowns. About seven percent of the CMBS world good for more than $40 billion in outstanding debt was transferred to special servicing in the first half of this year.

UPDATE: This story has been updated to include additional commentary from Hudson’s Bay and Saks Fifth Avenue.