In another high-profile commercial real estate foreclosure, lenders are moving to seize the Rainbow Promenade shopping center near U.S. 95 and Lake Mead Boulevard in northwest Las Vegas.
The 22-acre center is managed by Kimco Realty of New Hyde Park, N.Y., and is at 2051, 2101 and 2341 N. Rainbow Blvd., south of Smoke Ranch Road and near Lake Mead.
It’s anchored by the AMC Rainbow Promenade 10 theater, Barnes & Noble, Cost Plus World Market, OfficeMax and Party City. The center has been hurt in recent years by the closures of tenants including Linens ‘N Things and Petco.
Data published last month in VEGAS INC showed nearly 47,000 square feet of the 228,000-square-foot center was vacant.
Investors in the center’s mortgage represented by their trustee, U.S. Bank, filed suit Tuesday in Clark County District Court against property owner PK I Rainbow Promenade LLC, a Delaware company.
The suit alleges that PK I has defaulted on a $37.9 million loan originally made by JPMorgan Chase Bank in 2006.
The lawsuit says the lenders have initiated foreclosure proceedings against the center and asks the court to appoint a receiver to supervise the center and collect rent from tenants until a new owner is in place.
A request for comment was placed with Kimco Realty, a big player in the Las Vegas-area retail market. Other shopping centers it runs include the Warm Springs Promenade and Green Valley Town & Country centers in Henderson as well as, in Las Vegas, the Decatur Meadows, Sahara Pavilion South, Alamosa Plaza, Canyon Pointe S.C. and Cheyenne Commons centers.
The Rainbow Promenade foreclosure filing is the latest default involving Las Vegas-area commercial developments during the economic downturn, which saw the local retail vacancy rate skyrocket from about 3.2 percent before the recession to the 11.1 percent today.
During the past two months, similar situations arose involving these projects:
• The Grand Flamingo Centre at Flamingo Road and Grand Canyon Drive, near the Las Vegas Beltway, faces foreclosure proceedings. That center is occupied by businesses including Famous Dave’s, Starbucks, Zaba’s Mexican Grill and Euphoria Salon & Day Spa. It has several vacancies, including a building once occupied by Joe’s Crab Shack. A judge appointed a receiver to supervise the property on Nov. 6 after U.S. Bank filed suit, saying it had initiated foreclosure proceedings after the shopping center owner defaulted on its mortgage with $17.5 million due. Grand Flamingo is owned by a company called Flambelt SP LLC, which is controlled by Southern California developer World Premier Investments.
• Russell Crossing LLC was sued by Bank of Nevada. That suit alleges defaults under a mortgage backing a strip mall at 5651 S. Grand Canyon Drive, near Russell Road. The bank says $3 million is owed on the note, and it’s seeking a receiver to run the property.
• Oquendo Properties Ltd. was sued by U.S. Bank. The suit says Oquendo owes $2.2 million on a mortgage backing flex industrial/office property at 5030 W. Oquendo Road, near Decatur Boulevard and Russell Road. U.S. Bank has initiated a foreclosure against the real estate and is asking a judge to appoint a receiver to supervise the property.
Other recent foreclosure filings or properties taken over by lenders during the economic downturn involved the Decatur Crossing Center near Decatur Boulevard and U.S. 95, the Village Square center at Sahara Avenue and Fort Apache Road, the District at Green Valley Ranch, and Town Square at Las Vegas Boulevard and the Las Vegas Beltway.
Recently, however, the retail sector has brightened in some parts of town with construction set to resume at the stalled Shops at Summerlin and the developers of Tivoli Village in Northwest Las Vegas planning additional local retail projects.