MMPI responds to Journal report on High Point showrooms
Tom Edmonds -- Casual Living, July 29, 2010
Owners of Market Square and other Merchandise Market Properties Inc.
showrooms in High Point have decided to walk away from a $191 million
mortgage, letting it revert to a special servicer overseeing the mortgage,
the Wall Street Journal reported Tuesday.
Vornado Realty Trust, among the country's largest landlords, is opting to
forfeit the property after being more than 90 days delinquent in payments and
turn it over to the servicer J.E. Robert Cos. in a deed-in-lieu of
foreclosure, the paper said. J.E. Robert Cos. apparently would look for
another purchaser, a task that may be difficult in the current economy.
The properties include about 2 million square feet of showroom space in
downtown High Point, including Market Square, Furniture Plaza, the National
Furniture Mart, Plaza Suites and other buildings. The Journal said Vornado
stopped paying on the mortgage earlier this year after the property's cash
flow no longer covered the interest costs.
In response to media reports, MMPI issued a statement that business will go
on as usual at the market properties it manages in High Point. "There has
been no change in our best-in-class management team, our staff or our
operations. There is no change in how we manage our business, the way we
market our events, and the dedication we have to delivering value to our
tenants and the successful markets."
"Recent successes and investments by MMPI in High Point's leadership of the
home furnishings industry typify our commitment and point to a great future
for our High Point properties," the statement said. "This includes the
renewal and expansion of existing tenants, attracting new tenants to our
properties, the successful April 2010 market where we showcased our
investment and launch of the Suites at Market Square, and our continued
investment and planning under way for the October 2010 market."
"It is unclear what did prompt the current coverage, which is a recast of a
three-month-old story. MMPI remains highly responsible business partners with
our customers and industry colleagues. MMPI has always acted responsibly both
in High Point and across all our properties. We continue to work one-on-one
with our showrooms and exhibitors to ensure they continue to enjoy the
exceptional support and service that is our standard for MMPI properties and
Industry executives said they didn't think exhibitors or buyers will notice
any differences in the properties, but some tenants were concerned.
"As a tenant of the building, I think it's a legitimate concern as to whether
or not a special servicer will be able to take care of the building the way a
professional show organizer would," said John DeFalco, senior executive vice
president of importer Primo International, which leases about 19,000 square
feet on the ninth floor of the National Furniture Mart.
"It really comes down to a wait-and-see scenario. We'll have to work with the
special servicer to determine how it's going to move forward and hope they do
as good a job as MMPI did," DeFalco said.
"We are obviously a very interested party and are watching in hopes that this
is not disruptive in any way," said Alex Shuford III, vice president of sales
for Century Furniture, which, with sister company Highland House, occupies
about 65,000 square feet in Market Square. "When the Wall Street Journal
reports about it, it is one of those things we start to worry about. When you
starting talking about a building the size of Market Square, you don't want
to read about things like that. We have become very interested in what the
outcome will be."
Shuford noted, however, that when the company contacted MMPI, it was told not
to be concerned over the financial situation involving Vornado.
Furniture/Today editors Gary Evans, Clint Engel and Thomas Russell
contributed to this story.