Battle of Georgetown Park heats up

By Jonathan O'Connell
Monday, June 14, 2010

The two-man duel over ownership of the Shops at Georgetown Park may be turning into a full-on melee.

Developer Anthony Lanier, who contends he was illegally excluded from a deal to purchase the property by his former partner, Western Development, is teaming with JBG to bid on the mall now that it is facing possible foreclosure.

JBG, based in Chevy Chase, could provide Lanier's EastBanc with the cash needed to purchase a $70 million note on the property that Western defaulted on in March. Western, of which Herbert S. Miller is chairman, has not been able to renew or extend leases there because of Lanier's legal claim to the property, and the mall is now about half empty.

"The one thing I can do is confirm that we are working with Anthony Lanier on that investment, but other than that there's not much that I can do," said Robert A. Stewart, managing director of JBG Investment Management.

Lanier declined to confirm teaming with JBG, saying the Georgetown Park affair "has been a nightmare for a long time and hopefully it is over soon."

Capmark Finance, owner of the loan, filed for bankruptcy last October and has been trying to sell its position, twice planning and then canceling auctions before hiring the brokerage firm Jones Lang LaSalle to auction it off. A bankruptcy judge would have to approve any sale; bids are coming in now and a court decision is scheduled for June 29.

Other capital players are also expected to pursue the property, a reflection of the intense interest in distressed properties. John Kevill, managing director of capital markets for Jones Lang, said that he has already received a qualified initial or "stalking-horse" bid and that he expects "several qualified offers."

The winner, if it is not Miller, will likely try to foreclose on the property in order to own it outright. Asked whether he expects both Miller and Lanier to bid, Kevill said, "It's safe to say both these guys are very interested in the property."

Western developed the 315,000-square-foot mixed-use mall and office, then sold it and repurchased it for $84 million in 2006 with the Capmark loan.

"Unfortunately we cannot make any comment until the court makes its decision on June 29th," Miller said in an e-mail.

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