Sterling Organization has bought the Plaza Mexico, a roughly 400,000-square-foot shopping center in Lynwood, after the mall filed for bankruptcy in 2021.
The West Palm Beach-based investment firm paid $165 million for the property at a bankruptcy auction, the company said in a statement last week. Sterling scored a $106 million loan from Rialto Capital Management in connection with its purchase, public property records filed with L.A. County show.
Plaza Mexico’s previous owner, an entity linked to M+D Properties, filed for bankruptcy in April 2021, after defaulting on $106 million worth of senior loans and $14 million in mezzanine debt, according to court records.
The mall opened in 2002 and was once a hub for EB-5 investment, a visa program that allows foreign investors to obtain a green card in exchange for investing in real estate ventures. The program stalled in 2021 after lawmakers failed to come to an agreement over key features, but reauthorized it earlier this year.
M+D Properties, run by Donald and Min Chae, have struggled to keep hold of their retail properties in recent months. The firm recently put its 600,000-square-foot, mixed-use retail complex called The Source in Buena Park up for sale — a property that includes an unfinished hotel. That property also relied on EB-5 financing.
Sterling plans to renovate and lease up vacancy at the Plaza Mexico, which already houses a number of chain fast-food restaurants and grocery stores. Planet Fitness, Curacao, Skechers and Taco Bell lease space at the mall, according to Sterling. About 16 percent of the property is currently vacant, according to Sterling’s website.
The property was most recently valued at $170 million in October, showing its decline in value since then. However, the deal is higher than L.A.’s top retail sale of 2021, which was Onni Group’s $136 million purchase of the 1 million-square-foot Burbank Town Center. At $409 per square foot, it was also a pricier per foot deal — most large retail deals last year came out to under $200 a foot.
With Plaza Mexico, Sterling now owns seven retail properties in L.A., from Westlake Village to Beverly Hills to Huntington Park.