P.R. gov’t fetches $11.6M for former ‘Sears property’ in Hato Rey; 13 other assets on the block
The government of Puerto Rico has sold a commercial lot, known as the “former Sears property” in Hato Rey — held in the defunct Government Development Bank’s portfolio — for $11.6 million, this media outlet confirmed.
The property was sold in May, according to information released by real estate broker Christiansen Commercial Real Estate, which handled the transaction, on its website.
The appraisal value of the property was $16.6 million, according to a request for proposals document the Puerto Rico Fiscal Agency and Financial Advisory Authority released in August 2017.
The deal, which does not disclose the name of the buyer, comes after several unsuccessful attempts to sell the property, and nearly a year after the former GDB’s real estate-owned portfolio of properties were put back on the market, according to information provided to the Financial Oversight and Management Board for Puerto Rico in the GDB’s revised Fiscal Plan.
The property is described as “one of the largest available urban lots in the core of San Juan” with “strong development potential due to its central urban location.”
It’s “prime location for commercial + residential developments, recreational, elderly, student housing, mixed-use development, retail, office, hotel development, among other,” according to the RFP for sealed bid process handled by Christiansen Commercial.
Offers were accepted until March 9, 2018, with a closing date of June 30, 2018, the document further noted.
Before it was shuttered, the GDB held a portfolio of 15 real estate assets, the majority of which it acquired in exchange for a $150 million loan on Dec. 30, 2008, used by the central government to cover a portion of the FY2008-2009 deficit, according to the Fiscal Plan.
“The source of repayment for the $150 million loan was expected to come from the sale proceeds of the properties; however, previous sales efforts have been inconsistent and have yielded unsatisfactory results,” according to the plan.
To move the properties, the GDB created an REO Management and Disposition Working Group Committee to manage and sell properties through an “open, transparent, and orderly process since calendar year 2017.” The GDB engaged Christiansen to assist in the property preservation and sales efforts.
However, sales and marketing efforts were interrupted by Hurricanes Irma and María in September 2017. But in December, the government also sold the former “Codremar” property, located in San Juan, directly across from Paseo Caribe and next to the Club Naútico and Bahía Urbana on Fernández Juncos Avenue at the entrance to Old San Juan. It sold for $1.9 million, a significant discount from the $4.4 million appraisal value the government reported.
The government’s “overall sales strategy and disposition values have been adjusted to reflect the projected impact of the Hurricanes Irma and María, and assumes and orderly sale or transfer to the Recovery Authority of all such assets by the end of fiscal year 2019,” according to the Fiscal Plan.
The other properties listed by Christiansen Commercial Real Estate that are up for sale include:
- Parcel B, Santurce Sur Ward, also known as a the parcel of land currently being used for parking adjacent to the Sagrado Corazón Urban Train Station. The lot spanning a little more than 5 acres in Santurce, between Fernández Juncos and Muñoz Rivera Avenues is listed for $6.5 million. The appraisal value was estimated at $13.5 million in 2017.
- Río Bayamon North Community, comprising about 90 acres of land separated into 19 individual parcels and located off State Road PR-177, next to the Jardines de Caparra Urban Train Station. The development has infrastructure in place allowing for the construction of 2,888 Basic Living Units, 112,000 square feet of commercial space and 5,000 square feet of institutional-use space. Investment in current infrastructure surpasses $80 million, according to the listing. The government is seeking $25 million for the property, which the government said was appraised at $19.6 million.
- The former Luchetti School in Arecibo, comprising some 8 acres of land in Arecibo. The asking price is $899,000, and it is zones for institutional use, the listing states. The appraisal value a year ago was $1.36 million.
- The former Leprosarium in Trujillo Alto, a commercial development site consisting of some 25 acres of land. The asking price is $5.3 million, according to the listing, a discount from the more than $6 million appraisal value.
- An 85-acre lot adjacent to the San Lucas Hospital in Ponce. The asking price is $6 million, according to the listing. The appraisal value was set at $5 million.
- The Josefa Farm in Fajardo, near the Santa Rita Residential Development on Route 3. The vacant land spans about 205 acres, and is also near the Fajardo Marina and the Cayo Largo Resort. The property’s asking price is $4.5 million, versus the $5.3 million appraised value.
- The former Ruiz Soler Hospital in Bayamón, an 81,137 square-foot property that sits on nearly 5 acres of land on Route 2. The listing price is $1,875,000, which is less than the $2.47 million appraisal value.
- Vacant lot on the corner of Las Cumbres and San Ignacio Avenues in Guaynabo. The property is listed for $700,000 and is currently under contract. It was appraised for that same amount.
Also on the government’s list of properties to sell is the former National Guard building in Puerta de Tierra, valued at $7 million; a parcel of land at the Acuaexpreso property, valued at $2.4 million, a former mini golf range in Trujillo Alto, valued at $185,000; and a plot of land at the Guayanés Ward in Yabucoa, appraised at $260,000, according to the Fiscal Agency’s RFP.