Mall Redevelopment Projects Face Major Obstacles in Wake of Downturn

(Washington Post) — When Somera Capital Management announced the redevelopment of Laurel Mall in 2007, the Santa Barbara, Calif.-based firm was confident the project would be wrapped up by this year. Then the recession hit. Financing dried up. And the chances of turning the ailing, enclosed mall into a thriving mixed-use town center became slim. The owner has since watched occupancy fall to 15 percent, while waiting for a construction loan to come through.  Somera’s plight mirrors that of a number of local retail developers that started projects while the market was flushed with capital only to find themselves stalled once financing evaporated. Some of these players are finding a way out of the financial bind by teaming with private equity partners, but others have been less fortunate.

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