The owners of Georgetown Park shopping center, who've been looking for permanent financing to pay off expensive construction loans on the property, have agreed to sell possibly 80 percent of the mall to an arm of Coldwell Banker.
"We have an agreement for the financing," said Herbert S. Miller, president of Western Development Corp., one of the mall's three owners. "We are finalizing a joint venture agreement . . . to bring in an equity partner."
Miller refused yesterday to discuss any details of the new agreement, including the name of the new limited partner, the amount of money involved or the amount of the "substantial equity" that had been given up in order to secure the financing. Miller emphasized, "We're not selling Georgetown Park; we're financing it."
However, several local real estate sources said Coldwell Banker, the big commercial real estate subsidiary of Sears, Roebuck & Co. that was hired by the mall's owners last year to find a new equity partner, had organized a real estate investment trust from among the pension funds it manages.
The trust would provide permanent financing for the mall in return for 50 percent--and possibly as much as 80 percent--of the ownership, the sources said.
When the owners of Georgetown Park, which opened last September, started looking for a new moneyed partner nearly a year ago, they wanted $54 million in permanent financing and were willing to give up more than half of the ownership of the retail/residential complex.
Miller said only the mall and not the condominiums above it are included in the new agreements.
Earlier this month, the owners asked the mall's tenants to sign agreements concerning their leases, reading in part, "This certificate has been requested by landlord in connection with the proposed substantial equity investment in Georgetown Park Associates by a new limited partner in a transaction in which Coldwell Banker Commercial Group Inc. would become a general partner of Georgetown Park Associates."
The Commercial Group, composed of eight separate companies, is the real estate arm of Sears, Roebuck, which now owns Coldwell Banker. One of the companies is Capital Management Services, the nation's third-largest manager of institutional real estate investment funds that manages $500 million in pension and retirement funds on a discretionary basis, according to a Coldwell Banker spokesman.
Another Coldwell Banker spokesman said yesterday the Commercial Group usually steps in as a general partner when one of the real estate investment funds comes into a project as a limited partner--one which has limited legal liabilities.
In bringing in an equity partner, the Georgetown Park owners are following a trend begun in the mid-'70s when it became cheaper to sell some ownership in a project rather than seek traditional mortgages, which had become economically unfeasible.
Successful conclusion of an agreement with the new equity partner will get Miller and his partners--Donohoe Co. and Richard L. Kramer, a Western official--out from under their construction loans from the Bank of New York