Colonie Center owner to sell off three more properties

Less than three months after revealing a fourth quarter bankruptcy filing was a possibility, the co-

Categories: Business

Less than three months after revealing a fourth quarter bankruptcy filing was a possibility, the co-owner of Colonie Center said it is instead shedding three other shopping centers in a bid to say afloat.

Feldman Mall Properties, the beleaguered Long Island real estate investment trust, announced late Friday plans to sell its Stratford Mall in Bloomindale, Ill., Northgate Mall in Cincinnati and Golden Triangle Mall in Denton, Texas.

Feldman has entered into a letter agreement with Inland American Real Estate Trust, which will receive title to the malls and supply Feldman with $9.1 million in cash. In return, Feldman will repurchase from Inland, a Maryland trust, two million shares of cumulative convertible preferred stock.

The deal will leave Feldman with interests in malls in Colonie, Harrisburg, Pa., Tucson, Ariz., and Tallahassee, Fla. It needs Inland’s cash infusion to close a deal with Kodiak CDO II to redeem 28,500 shares of preferred securities belonging to an indirect subsidiary called FMP Statutory Trust I. Feldman also needs Inlands funding to redeem or retire $29.4 million in subordinate notes issued by that subsidiary in 2006.

Boards for both Feldman and Inland need to sign off on the agreement, and Feldman, which over the summer completed a nearly $100 million overhaul of Colonie Center, noted “there can be no assurances that any such transactions will be completed” due to the economic environment.

“In such an event, the company will need to raise sufficient additional capital or negotiate appropriate modifications to existing debt arrangements in order to continue to fund its ongoing operations,” Feldman said in a statement.

Feldman also announced a receiver has been appointed for its Tallahassee Mall on behalf of its first mortgage lender. The pending administrative shift is related to a $45.7 million impairment charge on the mall Feldman recorded in June.

The trust is also moving its trading activities from the Over-the-Counter Bulletin Board to the Pink OTC Markets, The shift — another cost-cutting initiative — will free Feldman of its obligations to file periodic and other reports under the Securities and Exchange Act.

Feldman posted a net loss of $83 million for the first half, compared to a net loss of $6 million for the same six-month period of 2007.

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