Cupertino Square deal brings new owners, returns to old name
– Katherine Conrad
Vallco Fashion Park is back and under new ownership.
In a deal that closed in September, Son Son Co., a Vietnamese food processing entity, paid $64 million for the 50-acre Cupertino Square in an all-cash sale, according to San Jose businessman Lap Tang.
“The property itself is valuable, but because there is so much empty space they were able to make a deal,” said Tang, who arranged the transaction. “This is a good buy. At one time it was appraised at $200 million.”
The new owners of the mall on North Wolfe Road decided to keep the old moniker and spruce up the towering sign that was never removed despite the name change.
Tang said Son Son, owned by Tram Be of Saigon, bought the property directly from Gramercy Capital Corp., which took ownership of the mall from Orbit Resources Inc. The New York firm’s CFO, Jon Clark, refused to confirm the sale.
Brokers from Jones Lang LaSalle, Bill Huelsman and Sherri Lusk, who handled the leasing on the property for two months over the summer, also refused to comment.
CJ Jackson, acting general manager for the mall, would confirm only the name of the new ownership: Vallco Shopping Mall LLC.
And so a new chapter opens for the long-troubled mall, which is one of the largest in the region at 1.2 million square feet. For the past few years, the mall has been threatened with foreclosure and finally went back to its lenders, Gramercy and United Commercial Bank, earlier this year after defaulting on a $113 million construction loan.
The 33-year-old mall, anchored by JCPenney, Sears and Macy’s, is just 59 percent occupied, posing an even bigger problem beyond the vacant storefronts. AMC Theaters does not have to pay rent as long as the mall is less than 65 percent occupied.
It will take time to lease another 6 percent, but Tang is confident this group will succeed and AMC will start paying rent again.
Tang, who is also developing Vietnam Town in San Jose, said he began shopping the former Cupertino Square in early summer, telling Vietnamese investors that for anyone with money, this was a good opportunity.
The developer said he suggested renaming the mall Vallco.
“People call it Vallco no matter what,” Tang said. “So I recommended the old name. Thirty years ago, it was the best mall in town.”
He does not, however, recommend redesigning the mall with an Asian theme.
“Right now the market is saturated with Asian centers,” he said. “I told them to keep it open to the general market.”