De La Hoya's Sears project KO'd

The boxing star's investment company, Golden Boy Enterprises, had teamed up with two local developers in trying to buy the Boyle Heights property and develop it into mixed-use retail and residential. But seller Mark Weinstein said the group wanted to discuss a price reduction, plus an extension of five months in order to finance the deal. But with real estate in such bad shape, Weinstein didn't want to wait that long and run the risk of losing potential buyers (apparently the De La Hoya investors had trouble coming up with the retail component). Escrow on the property had been extended from October to the end of December. From the L.A. Business Journal:

Richard Moody, the chief operating officer of Santa Monica-based MJW, said his company wanted to move forward with other possible buyers – especially given the declining real estate market. “We aren’t going to take the additional risk of four to five months and find out they need more time when we have other buyers interested in the property,” Moody said.

[CUT]

The Sears site has been the target of several failed redevelopment attempts. MJW purchased the property for $40 million in 2004 with the intent of pursuing its own redevelopment project, but never broke ground, instead deciding to sell the property. Previously Weinstein said he wanted to devote more time to other interests.

Until recently, commercial real estate had managed to escape many of the problems being faced on the residential side, but those days are over. Deals are becoming harder to put together because lenders have become more demanding. L.A. has one thing on its side: still-heavy demand for office and industrial space. But residential and retail are taking it on the chin and even the office sector is variable, based on location.